Condition: The Municipality could not provide supporting documentation for the disbursement of $173,454 of program funds. These disbursements were accounted for as increase in the due from other funds account. We could not ascertain that the disbursements of $173,454 complied with program regulations. Context: The Municipality received $123,938 of program funds during the fiscal year ended on June 30, 2022. A total of $173,454 of program funds were disbursed without sufficient and appropriate documentation. These funds were disbursed as electronic transfers to other municipal accounts and were accounted for as increases in the due from other funds account. The Municipality repaid during the current year the amount of $447,816 related to last year’s disbursements to the due from other funds account. As of June 30, 2022 the balance of the due from other funds account is $555,110. Program regulation states that costs must be directly tied to the performance of eligible work; adequately documented; reduced by all applicable credits, such as insurance proceeds and salvage values; authorized and not prohibited under Federal or State government laws or regulation; consistent with the applicant’s internal policies, regulations, and procedures that apply uniformly to both Federal awards and other activities of the applicant; and necessary and reasonable to accomplish the work properly and efficiently. We could not ascertain that these disbursements complied with program regulations. The Public Assistance Program is authorized under the Robert T. Stafford Disaster Relief and Emergency assistance Act, as Amended (Stafford Act). Assistance is provided so that communities can quickly respond to and recover from major disasters or emergencies declared by the President. The Municipality has approved grants for the Hurricane Irma and Maria disasters declared on September 2017 (disasters 3384EMPR, 4336 DRPR and 4339 DRPR). The program approves funding for debris removal, emergency protective measures, and the restoration of disaster-damaged, publicly owned facilities. It also encourages protection of damaged facilities from future incidents by providing assistance for hazard mitigation measures. Criteria: Uniform Guidance states in 2 CFR 200.403 that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. As per 2 CFR 200.302 the other non-Federal entity’s financial management system must provide for the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statues, regulations, and the terms and conditions of the Federal Award. As per 44 CFR section 206.201 and 206.203, the public assistance program provides grant funding for emergency protective measures and debris removal (Emergency Work) and for permanent restoration of damaged facilities, including cost-effective hazard mitigation to protect facilities from future damage (Permanent Work). Cause: The Municipality applied inconsistent program procedures to the three disbursement transactions totaling $173,454. Effect: Remedies for noncompliance are described in 2 CFR 200.339. Grantor may impose additional conditions as described in 2 CRF 200.208 or take one or more of the actions listed on 2 CRF 200.339 as appropriate in the circumstances. Program regulations provide for recovery of assistance and penalty provisions on 44 CFR Part 206. Auditor’s recommendation: The Municipality must strengthen internal controls and procedures to assure that disbursement of program funds are properly documented, can be directly tied to the performance of eligible work, and is allowed under program regulations. Views of Responsible officials and corrective actions: The Municipality Administration is committed to identify the control of deficiency that allowed for the deficiency to happen. Additionally, the administration is committed to implementing the correct control structure to prevent the situation from happening in the future. The Municipality Management will continue the search of supporting documentation of the highlighted transactions. New proposed control structure to be evaluated by Municipality for adequacy. Audit Status: In process of completion.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-004 Strengthen Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Numbers: S010A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: $37,644 Repeat of Prior Year Findings: FA 2021-002, FA 2019-002 Description: The School District did not file accurate completion reports for the Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE web portal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.302(a) state in part that “the 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.” In addition, Provisions included in the Uniform Guidance Section 200.302(b)(2) state in part that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of the School District’s accounting records and the completion report related to the Title I-A, Improving Academic Achievement of the Disadvantaged program for the period ending September 30, 2022, revealed that the expenditures were over reported by $37,644. Questioned Cost: Questioned cost of $37,644 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: In discussing this deficiency with the School District, they stated these issues were a result of turnover within the Central Office. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District obtained more federal funding than they were eligible to receive. Additionally, this funding must be returned to GaDOE. Recommendation: The School District should establish internal control procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and DE-0147 reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-004 Strengthen Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Numbers: S010A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: $37,644 Repeat of Prior Year Findings: FA 2021-002, FA 2019-002 Description: The School District did not file accurate completion reports for the Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE web portal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.302(a) state in part that “the 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.” In addition, Provisions included in the Uniform Guidance Section 200.302(b)(2) state in part that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of the School District’s accounting records and the completion report related to the Title I-A, Improving Academic Achievement of the Disadvantaged program for the period ending September 30, 2022, revealed that the expenditures were over reported by $37,644. Questioned Cost: Questioned cost of $37,644 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: In discussing this deficiency with the School District, they stated these issues were a result of turnover within the Central Office. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District obtained more federal funding than they were eligible to receive. Additionally, this funding must be returned to GaDOE. Recommendation: The School District should establish internal control procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and DE-0147 reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
2022-002 – INTERNAL CONTROL OVER COMPLIANCE MATERIAL WEAKNESS CRITERIA Per Uniform Guidance (2 CFR Part 200.302), the grantee must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the grantee is managing the Federal award in compliance with statutes, regulations, and the terms and conditions of the Federal award. CONDITION The Authority did not maintain proper supporting documentation of program expenses, and proper authorization of expenses could not be determined. CAUSE The Authority did not have proper controls over certain the Housing Choice Voucher program expenses. EFFECT This deficiency in internal controls resulted in unsupported transactions. QUESTIONED COSTS Likely questioned costs are estimated to be less than $25,000. CONTEXT We reviewed the Authority’s internal controls over compliance with federal awards. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend the Authority’s management review its internal control practices and ensure proper program authorization of program expenses. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
2022-002 Financial Statement Reconciliations/Tie-In Procedures Significant Deficiency CONDITION: A weakness existed in the overall reconciliation/tie-in procedures performed over the School’s financial statement accounts for the fiscal year ended June 30, 2022. Financial accounts were either reconciled untimely or in some cases, accounts were not reconciled at all. Most of these accounts should be reconciled on a monthly basis. The major areas where reconciliation procedures were weak included:A) Beginning Balances B) Cash Balances C) Account Receivables D) Grant Receivables/Unearned Revenues E) Accounts Payable F) Grant Revenue CRITERIA: OMB Uniform Guidance states the following in section 200.302, “(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. CAUSE: Lack of written policies and procedures over financial tie-in procedures that identify who is responsible for performing these tie-in/reconciliation procedures. EFFECT: In the course of performing the audit, the auditor recommended 10 adjusting journal entries be made to the financial statements for fiscal year ending June 30, 2022. Many of these adjustments could have been avoided if timely reconciliation and tie-in procedures had been conducted by the finance department. Many of these audit adjustments were material in nature.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Financial Reporting Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR section 200.302(b))3) requires that nonfederal entities keep records that include info: pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation Condition – The Organization did not maintain proper documentation in support of financial reporting requirements. Cause – Supporting records used to populate the required financial reporting were not retained by the Agency. Effect – The agency could submit incorrect information. Questioned Costs – Not applicable. Recommendation – Documentation should be prepared, reviewed, and retained to support the required reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Condition: For the fiscal year ended June 30, 2022, we requested that Day One prepare and send us a Schedule of Expenditures of Federal Awards. Requested that the expenditures reported in the SEFA be reconciled to Day One’s accounting records. We reviewed the SEFA and compared them to the accounting records; we noted that the expenditures reported were inaccurate. Criteria: Recipients of federal awards are subject to requirements documented in section of the Uniform Guidance Sections 200.510, 200.502, and 200.302. The criteria for each are as follows: § 200.510 Financial statements (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502.” § 200.502 Basis for determining Federal awards expended (a) Determining Federal awards expended. The determination of when a federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. § 200.302 Financial management (a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.The financial management system of each non-Federal entity must provide for (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements…..” Questioned Costs: None Cause: The Organization has not implemented policies and procedures requiring that the Schedule of Federal Awards to complete and accurate. Effect and Context: The Organization reported expenditures that exceeded $750,000 for 2022. In determining the major program to be audited for 2022, the auditor could not rely on the SEFA provided because the SEFA was not complete and expenditures reported were inaccurate. Which could have lead to an inaccurate reporting of federal expenditures for the Organization for 2022. Recommendation: We recommend that management implement policies and procedures requiring all federal expenditures be accurately reported in the year end Schedule of Federal Awards. Management’s Response and Corrective Action Plan: See management’s responses documented on page 46-47.
Condition: For the fiscal year ended June 30, 2022, we requested that Day One prepare and send us a Schedule of Expenditures of Federal Awards. Requested that the expenditures reported in the SEFA be reconciled to Day One’s accounting records. We reviewed the SEFA and compared them to the accounting records; we noted that the expenditures reported were inaccurate. Criteria: Recipients of federal awards are subject to requirements documented in section of the Uniform Guidance Sections 200.510, 200.502, and 200.302. The criteria for each are as follows: § 200.510 Financial statements (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502.” § 200.502 Basis for determining Federal awards expended (a) Determining Federal awards expended. The determination of when a federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. § 200.302 Financial management (a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.The financial management system of each non-Federal entity must provide for (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements…..” Questioned Costs: None Cause: The Organization has not implemented policies and procedures requiring that the Schedule of Federal Awards to complete and accurate. Effect and Context: The Organization reported expenditures that exceeded $750,000 for 2022. In determining the major program to be audited for 2022, the auditor could not rely on the SEFA provided because the SEFA was not complete and expenditures reported were inaccurate. Which could have lead to an inaccurate reporting of federal expenditures for the Organization for 2022. Recommendation: We recommend that management implement policies and procedures requiring all federal expenditures be accurately reported in the year end Schedule of Federal Awards. Management’s Response and Corrective Action Plan: See management’s responses documented on page 46-47.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
Type: Federal Award, Significant Deficiency, Controls over Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number: U.S. Department of Housing 14.218 Community Development Block Grant U.S. Department of Treasury 21.019 Coronavirus Relief Fund Criteria/Requirement: The Organization’s accounting system should clearly identify federal expenditures with minimal adjustments in accordance with 2 CFR 200.302. Condition/Context: The Organization did not identify all federal awards and significant audit adjustments were required to the SEFA prepared by management. Cause: The Organization received additional funding due to COVID-19 increasing the complexities of tracking by specific components of the award. A significant portion of the tracking is maintained in manual spreadsheets outside of the accounting system. Effect: Total expenditures by federal funding source may not be properly reported and Uniform Guidance reporting may be inaccurate. Questioned Costs: None. Recommendation: The Organization should implement additional procedures and controls to accurately capture all activity under federal awards in preparing the SEFA. Management’s Response: The Organization experienced disruption due to COVID-19 that had impacts on capacity. New contracts and source of funding are now being identified and recorded in the accounting system.
2021-005 Material Weakness and Material Noncompliance: Grant and Reporting Compliance Department of Commerce - Investments for Public Works and Economic Development Facilities – CFDA No. 11.300 - Year ended June 30, 2022 Condition: The City failed to adequately review and reconcile the last pay request from the contractor and overpaid the contractor. As a result, the City also requested this overpayment amount from the Federal grant and it was funded to the City. Requests for reimbursement and semi-annual reporting is being reviewed by financial management, but there was no evidence that a reconciliation to the accounting system (i.e. general ledger) was performed, which resulted in material misstatements in the requests and reporting. Criteria: As a requirement of Federal cost principles found in 2 CFR 200.302, as well as the grant agreement with the U.S. Department of Commerce Economic Development Administration (EDA), the City’s accounting system should reconcile directly, and easily, to the grant reports/funds requests submitted to the grantors, the grant reporting should be free of material misstatements, and the grant files should be appropriately organized. Additionally, costs paid on this project with Federal funds cannot consist of improper payments, including overpayments, which are considered unallowable costs under the Federal cost principles. Cause: There was no reconciliation of grant reporting (including funds requests) to the general ledger in the accounting system, which resulted in the overpayment and overfunding. Effect: Grant project costs reporting (SF-425) were submitted to EDA with material misstatements and funds requests (SF-271) were misstated resulting in the overfunding of project costs. Material weakness in internal controls over compliance and material noncompliance with reporting occurred due to these misstatements and the lack of reconciliation to the accounting system. The same questioned costs as stated in Finding 2022-001, $52,446, also relates to this major award program. Context: The audit examined 100% of the fund’s requests (SF-271 #3 through #10) covering the entire fiscal year accrual period. The total Federal share requested exceeded total allowable project costs by $52,446, the amount of the questioned costs. The overpayment of the contractor and overfunding appear to be isolated and not pervasive. This is a repeat finding. Recommendation: I recommend the City ensure the accounting system reconciles to the funds requests without exception, to ensure invoices from contractors are correct before paying and to document the reconciliation to the accounting system. Views of Responsible Officials: The City agrees with the finding.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Finding 2022-003 21.027 - Coronavirus State and Local Fiscal Recovery Funds 93.268 - Immunization Cooperative Agreements 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Criteria 2 CFR Part 200.302(b)(7) requires the financial management system to include written procedures for determining the allowability of costs. Condition Hood River County has not developed written procedures for determining the allowability of costs. Cause Administration did not have written procedures for determining the allowability of costs. Effect Unallowable costs could be charged to the program. Questioned Costs None Recommendations Management should develop written procedures as required by 2 CFR Part 200.302(b)(7). Views of Responsible Officials Hood River County is currently working on several updated Grant procedures that include an update to the procedure related to Allowability of Costs. These updates are happening in the current fiscal year.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
Assistance Listings number and name: 84.010 Title I Grants to Local Educational Agencies Award numbers and years: S010A180003, July 1, 2018 through September 30, 2019; S010A190003, July 1, 2019 through September 30, 2020; S010A200003, July 1, 2020 through September 30, 2021; S010A210003, July 1, 2021 through September 30, 2022 Assistance Listings numbers and names: 84.425C COVID-19 Governor’s Emergency Education Relief (GEER) Fund 84.425D COVID-19 Education Stabilization Fund—Elementary and Secondary School Emergency Relief (ESSER) Fund 84.425R COVID19 Education Stabilization Fund—Emergency Assistance to Non-Public Schools (EANS) 84.425U COVID-19 Education Stabilization Fund—American Rescue Plan—ESSER Fund (ARP ESSER) 84.425V COVID-19 Education Stabilization Fund—American Rescue Plan—Emergency Assistance to Non-Public Schools (ARP EANS) 84.425W COVID-19 Education Stabilization Fund—American Rescue Plan—Elementary and Secondary School Emergency Relief—Homeless Children and Youth Award numbers and years: ISA-ERMT-21-5008, July 1, 2020 through June 30,2021; ISA-GEER-ADE-070121-04, July 1, 2021 through June 30, 2023; ISA-GEER-ADE-070121-02, July 1, 2021 through June 30, 2023; S425D200038, May 11, 2020 through September 30, 2021; S425D210038, March 13, 2020 through September 30, 2023; S425R210003, April 23, 2021 through September 30, 2023; S425U210038, March 13, 2020 through September 30, 2024; S425V210003, February 18, 2022 through September 30, 2024; S425W210003, April 23, 2021 through September 30, 2023 Federal agency: U.S. Department of Education Compliance requirement: Not applicable Questioned costs: Not applicable Condition—Contrary to federal regulation and the State’s accounting manual, the Department of Education’s (Department) initially prepared schedule of expenditures of federal awards (SEFA), which totaled nearly $2.5 billion, contained significant errors that required correction for it to be reliable for determining federal programs to be audited and for inclusion in the State of Arizona’s SEFA. Specifically, the Department: • Understated expenditures for Title I—Grants to States (ALN 84.010) by over $318.3 million. • Overstated expenditures for the Education Stabilization Fund (ALN 84.245) by over $96.2 million. • Misstated total federal award expenditures by nearly $2.6 billion (gross error amount including those described above) for 42 of its 52 programs, which resulted in net overstatement of $37.5 million. • Misstated total expenditures passed through to subrecipients by nearly $3.5 billion (gross error amount) for 37 of its 52 programs, which resulted in a net overstatement of $8 million. • Inaccurately reported program titles for 14 programs and the wrong federal agency for 1 program. Effect—Although the Department corrected the significant misstatements we identified, the Department’s misstatements on its SEFA placed the State’s SEFA at risk of being misstated and potentially wasting public monies because misstated amounts could result in auditors unnecessarily auditing the wrong federal programs. Specifically, the Department’s misstatements on its SEFA could have resulted in it providing inaccurate information to the Arizona Department of Administration (ADOA) for inclusion in the State’s SEFA, which would have resulted in those who rely on the information it contains being misinformed, including ADOA, the Legislature, and federal agencies and pass-through grantors. This finding was not a result of internal control deficiencies of individual federal programs and accordingly, did not have a direct and material effect on the reporting requirements of the federal programs the Department administers. Cause—Although the Department is responsible for preparing a schedule of its federal award expenditures for inclusion in the State’s SEFA for the State’s single audit, it did not follow the requirements in the State’s accounting manual to compile all the federal award information necessary to prepare an accurate and complete SEFA. In addition, the Department’s reviews performed on its initially prepared SEFA were not effective to detect and correct these significant errors because the reviewers lacked training on the SEFA’s required content and how to obtain it. Criteria—Federal Uniform Guidance regulation requires the Department to separately identify in its accounts all federal awards received and expended and prepare an accurate and complete SEFA that reports its federal award expenditures for the year (2 Code of Federal Regulations [CFR] §§200.302 and 200.510). Further, the State’s accounting manual states that in order to reduce the number of deficiencies identified during the State-wide single audit, to better comply with the updated provisions of the federal Single Audit Act, and to increase the efficiency in compiling the State-wide SEFA, the revised formatting guidelines set forth in State’s accounting manual must be adhered to by any agency submitting an agency SEFA to ADOA’s General Accounting Office (State of Arizona Accounting Manual, Topic 70: Grants, Section 15). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—To help ensure that it prepares a SEFA that is accurate and complete, the Department should: 1. Follow the State’s accounting manual requirements to compile all the federal award information necessary to prepare its SEFA, including the sources from which the information is to be obtained. 2. Require an effective and independent review of its SEFA to help ensure the SEFA is accurate and complete and complies with federal Uniform Guidance requirements prior to submitting it for audit. 3. Train those responsible for preparing and reviewing the SEFA on the State’s accounting manual requirements. The State’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.