CONDITION: During my sample review of the District’s completion of its federal grant program ‘Quarterly Cash On Hand Reconciliations’ for the 2021-2022 4th fiscal quarter for the ESSER II and ARP ESSER grants, I noted that the amounts reported to date for ‘total disbursements’ could not be ascertained from the coding of these expenditures in the District’s general ledger (See Finding 2022-005) and did not reconcile to the separate spreadsheets maintained by the School District. This is a repeat finding (2021-006) from the previous fiscal year. CRITERIA: Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance requires non-federal organizations such as the School District to maintain financial records which account for federal funds in such a manner as to be able to properly track the identification and use of federal funds. EFFECT: The School District did not comply with Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance which prescribes the proper financial management system for the tracking of federal program expenditures. CAUSE: The School District did not utilize the federal source code tracking system as prescribed by the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts, which would have enabled the District to print reports from the accounting software system, by federal source program, to properly prepare the quarterly reconciliations. It was not readily determinable as to why the ‘total disbursements’ line on the quarterly cash on hand reconciliations did not match the separate spreadsheets the School District utilized for tracking federal program expenditures. QUESTIONED COSTS: None RECOMMENDATION: I am recommending that the School District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the School District, most specifically, federal program grant expenditures to comply with the recordkeeping requirements for federal funds as specified in Section 2 CFR Part 200.302(a) and 302(b) of the Uniform Guidance, to allow for the proper completion of the ‘quarterly cash on hand reconciliations’. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: The District did not properly record its federal program expenditures for the GEER, ESSER, and ARP ESSER federal grant programs using the various federal funding source expenditure codes as prescribed by the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations. This is a repeat finding (2021-005) from the previous fiscal year. CRITERIA: The Pennsylvania Department of Education (PDE), through the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts requires School Districts to utilize specific funding source codes for federal program expenditures. In addition, Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance requires non-federal organizations such as the School District to maintain financial records which account for federal funds in such a manner as to be able to properly track the identification and use of federal funds. EFFECT: By not using federal source codes to properly track its federal program expenditures for the GEER, ESSER, and ARP ESSER federal grant programs, the School District did not comply with the financial reporting standards for federal program expenditures as prescribed by the Pennsylvania Department of Education, through the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts and Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance. This situation significantly reduced the District’s internal controls over the ability to properly manage and account for these federal program expenditures in accordance with the compliance requirements of PDE and the Uniform Guidance. CAUSE: Management used proper funding source codes for the revenues received under the GEER, ESSER, and ARP ESSER federal grant programs, but erroneously did not realize the federal funding source coding applied to expenditures as well. QUESTIONED COSTS: None RECOMMENDATION: I am recommending that the School District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the School District, most specifically, federal program grant expenditures to 1) enhance internal controls for tracking and monitoring federal program expenditures and 2) comply with the recordkeeping requirements for federal funds as specified in Section 2 CFR Part 200.302(a) and 302(b) of the Uniform Guidance and PDE regulations. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my sample review of the District’s completion of its federal grant program ‘Quarterly Cash On Hand Reconciliations’ for the 2021-2022 4th fiscal quarter for the ESSER II and ARP ESSER grants, I noted that the amounts reported to date for ‘total disbursements’ could not be ascertained from the coding of these expenditures in the District’s general ledger (See Finding 2022-005) and did not reconcile to the separate spreadsheets maintained by the School District. This is a repeat finding (2021-006) from the previous fiscal year. CRITERIA: Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance requires non-federal organizations such as the School District to maintain financial records which account for federal funds in such a manner as to be able to properly track the identification and use of federal funds. EFFECT: The School District did not comply with Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance which prescribes the proper financial management system for the tracking of federal program expenditures. CAUSE: The School District did not utilize the federal source code tracking system as prescribed by the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts, which would have enabled the District to print reports from the accounting software system, by federal source program, to properly prepare the quarterly reconciliations. It was not readily determinable as to why the ‘total disbursements’ line on the quarterly cash on hand reconciliations did not match the separate spreadsheets the School District utilized for tracking federal program expenditures. QUESTIONED COSTS: None RECOMMENDATION: I am recommending that the School District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the School District, most specifically, federal program grant expenditures to comply with the recordkeeping requirements for federal funds as specified in Section 2 CFR Part 200.302(a) and 302(b) of the Uniform Guidance, to allow for the proper completion of the ‘quarterly cash on hand reconciliations’. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: The District did not properly record its federal program expenditures for the GEER, ESSER, and ARP ESSER federal grant programs using the various federal funding source expenditure codes as prescribed by the Chart of Accounts for PA Local Educational Agencies maintained by the PA Office of the Budget, Office of Comptroller Operations. This is a repeat finding (2021-005) from the previous fiscal year. CRITERIA: The Pennsylvania Department of Education (PDE), through the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts requires School Districts to utilize specific funding source codes for federal program expenditures. In addition, Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance requires non-federal organizations such as the School District to maintain financial records which account for federal funds in such a manner as to be able to properly track the identification and use of federal funds. EFFECT: By not using federal source codes to properly track its federal program expenditures for the GEER, ESSER, and ARP ESSER federal grant programs, the School District did not comply with the financial reporting standards for federal program expenditures as prescribed by the Pennsylvania Department of Education, through the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts and Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance. This situation significantly reduced the District’s internal controls over the ability to properly manage and account for these federal program expenditures in accordance with the compliance requirements of PDE and the Uniform Guidance. CAUSE: Management used proper funding source codes for the revenues received under the GEER, ESSER, and ARP ESSER federal grant programs, but erroneously did not realize the federal funding source coding applied to expenditures as well. QUESTIONED COSTS: None RECOMMENDATION: I am recommending that the School District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the School District, most specifically, federal program grant expenditures to 1) enhance internal controls for tracking and monitoring federal program expenditures and 2) comply with the recordkeeping requirements for federal funds as specified in Section 2 CFR Part 200.302(a) and 302(b) of the Uniform Guidance and PDE regulations. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
CONDITION: During my sample review of the District’s completion of its federal grant program ‘Quarterly Cash On Hand Reconciliations’ for the 2021-2022 4th fiscal quarter for the ESSER II and ARP ESSER grants, I noted that the amounts reported to date for ‘total disbursements’ could not be ascertained from the coding of these expenditures in the District’s general ledger (See Finding 2022-005) and did not reconcile to the separate spreadsheets maintained by the School District. This is a repeat finding (2021-006) from the previous fiscal year. CRITERIA: Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance requires non-federal organizations such as the School District to maintain financial records which account for federal funds in such a manner as to be able to properly track the identification and use of federal funds. EFFECT: The School District did not comply with Section 2 CFR 200.302(a) and 302(b) of the Uniform Guidance which prescribes the proper financial management system for the tracking of federal program expenditures. CAUSE: The School District did not utilize the federal source code tracking system as prescribed by the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts, which would have enabled the District to print reports from the accounting software system, by federal source program, to properly prepare the quarterly reconciliations. It was not readily determinable as to why the ‘total disbursements’ line on the quarterly cash on hand reconciliations did not match the separate spreadsheets the School District utilized for tracking federal program expenditures. QUESTIONED COSTS: None RECOMMENDATION: I am recommending that the School District properly follow the guidance contained within the PA Office of the Budget, Office of Comptroller Operations Chart of Accounts for recording all expenditures of the School District, most specifically, federal program grant expenditures to comply with the recordkeeping requirements for federal funds as specified in Section 2 CFR Part 200.302(a) and 302(b) of the Uniform Guidance, to allow for the proper completion of the ‘quarterly cash on hand reconciliations’. VIEWS OF RESPONSIBLE OFFICIALS: The School District concurs with the above noted finding and addresses this issue in the ‘Corrective Action Plan’ included within this report.
2022-002 Financial Management and Internal Controls Compliance Requirement Allowable Costs/Cost Principles Category Significant Deficiency in Internal Control and Noncompliance Federal Agency U.S. Department of the Treasury Pass-Through Entity Puerto Rico Fiscal Agency and Financial Advisory Authority ALN 21.027 Federal Program COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Criteria 2 CFR section 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. (b) ….. (1) ….. (2) ….. (3) ..... (5) ….. (6) ….. (7) Written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award. 2 CFR section 200.303 Internal controls. The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. Condition Written Policies The Corporation has no written policies for determining the activities allowed or unallowed and the allowability of costs as described in subpart E, Cost Principles of 2 CFR Part 200. Cause It is the first year for the Corporation to be subjected to a single audit compliance requirements. However, since the Commonwealth of Puerto Rico (the Commonwealth) filed for Title III under the PROMESA, all the instrumentalities of the Commonwealth had to reduce their staff as part of the Fiscal Plan to reduce expenditures. This has disrupted the segregation of duties, which is a key control. Effect The Corporation could incurred in unallowable costs failing to comply with 2 CFR sections 200.302 and 202.305, the Corporation could then be subjected to temporarily withholding of cash payments pending correction of the deficiency and/or withholding further federal awards for the program. Questioned Costs None Recommendations We recommend the Corporation obtain a thorough understanding of the provisions of federal statutes, regulations, or the terms and conditions of federal awards to prepare the required written policies under subpart E, Cost Principles of 2 CFR Part 200. Views of responsible officials Refer to Corrective Action Plan section.
Finding 2022-001 – B. Allowable Costs Federal Agency: U.S. Department of Health and Human Services Passthrough Entity: N/A Assistance Listing Number and Federal Program: 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services Criteria: In accordance with 2 CFR part 200.302, the Association is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Additionally, in accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records, among other things, should support the distribution of the employee’s salary or wages among specific activities if the employee works on a Federal award and non-Federal award. Budget estimates do not qualify as support for charges to Federal awards. Statement of Condition: During the course of our audit, supporting detail for expenses allocated and charged to the grant was not available and could not be determined. Salaries and benefits charged to the grant were based on estimates of employees’ expected workload and client needs, and not supported by records that accurately reflected the work performed on the Federal program. Additionally, the de minimis indirect cost rate was not correctly calculated and applied. The indirect cost charged to the grant was based on the indirect cost obligated by the Notice of Award rather than by calculating the indirect cost from the modified total direct cost base. Statement Cause: This is the first year the Association received this type of grant funding, coupled with significant growth experienced by the Association, the accounting system and staff were not yet prepared to effectively adhere to the requirements of the grant. Supporting documentation is not available for employees’ actual time spent and charged to the grants. Statement of Effect: Without proper accounting of expenditures and support of salaries and wages, grant expenditures can be over or understated on the drawdown requests. This could result in noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs were identified. Identification of Repeat Findings: Not a repeat finding. Recommendations: Project codes or classes should be created within the accounting system, if available. This will allow for expenses to be properly segregated by grant or other funding. When expenses are properly segregated, the indirect cost can be properly calculated using the correct direct cost base. The Association should also implement that all employees submit personnel activity reports to provide documentation of their time allocated to the grant. Views of Responsible Official(s): The Association is in agreement with the finding and is continuing to expand their knowledge on grant expenditures and compliance as it relates to the new financial management software to aid in tracking grants. See corrective action plan.
Financial Management System- (Material Weakness) Criteria:According to 2 CFR 200.302, the financial management system of each non-Federal entity must provide records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: Statement of financial position transactions were not allocated properly to programs/properties funded with federal funds. Cause: Due to a human error of individuals who were handling the accounting entries, some of transactions were not accurately allocated to the correct programs/properties. Effect: Improper allocation of transactions among various programs/properties could lead to comingling of funds from different projects. This could result in unallowable cost or in allowable cost charged simultaneously to two different programs/properties. Questioned Cost: Undetermined Recommendation: Establish an internal control procedures in place that provide for separate accountability for projects by allocating transactions properly and producing accurate financial reports for each federally funded programs/properties. Management's Views and Corrective Action Plan Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost
Finding 2022-006 Assistance Listing Number: 19.510 Program Title: U.S. Refugee Admissions Program Agency: U.S. Department of State Pass-Through Entity: United States Conference of Catholic Bishops Federal Award Identification Number: SPRMCO21CA3001, SPRMCO22CA0023 and SPRMCO21CA3291 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance Criteria: In accordance with Title 2 CFR Part 200.302, costs must be supported by source documentation. In accordance with Title 2 CFR Part 200.403, costs must be adequately documented to be allowable costs under the federal program. The Cooperative Agreement with the U.S. Department of State requires recipients to maintain a case file for each client that includes client acknowledgement of receipt of direct assistance. Condition: We tested fifty-two non-payroll expenditures charged to the federal program. Of the fifty-two expenditures, six expenditures did not have any supporting documentation that could be located. We tested forty non-payroll expenditures charged to the program to ensure the Client Acknowledgement of Receipt of Direct Assistance Form was obtained. Of the forty expenditures, two forms were missing. Therefore, an additional twenty-five expenditures charged to the program were selected, and one additional form was missing from the expanded sample. Cause: Catholic Charities was unable to locate supporting documentation for non-payroll expenditures charged to the federal program. Effect: Six non-payroll expenditures did not have any supporting documentation as required by Title 2 CFR Part 200.302 and Title I CFR Part 200.403. Three non-payroll expenditures did not have the Client Acknowledgement of Receipt of Direct Assistance Form. Questioned Costs: $2,541 Context: Total non-payroll expenditures charged to the federal program was $559,001. Repeat Finding: Not applicable. Recommendation: We recommend Catholic Charities maintain supporting documentation for all expenditures charged to the federal program. We also recommend Catholic Charities ensure the signed Client Acknowledgement of Receipt of Direct Assistance Form is maintained. Views of the Responsible Officials: Catholic Charities of Central and Northern Missouri agrees with this finding and while some of the problems which arose were related to a burst water pipe over an extended holiday that destroyed many of the records, All invoices and documentation related to expenditure of federal funds are now scanned and attached to the accounting entry recording the payable. With regards to the Client Acknowledgement of Receipt of Direct Assistance Forms, much of that issue was related to cultural issues where male refugees would not let their spouses sign any such documentation. We have taken steps to ensure that the documentation is signed at the time assistance is given and continue to work with the refugees as to the importance of having the proper paperwork on file.
Condition: The Municipality failed to identify, within their records, a list of transactions, nor could provide supporting documentation for the disbursement of $373,670 of program funds. Several inconsistencies between the disbursement and supporting documentation were observed for disbursements totaling $8,579. A total of $373,670 of program funds were transferred to other accounts of the Municipality. The Municipality did not provide us with supporting documentation for transactions totaling $373,670, therefore, we could not ascertain that these transactions complied with program regulations. Context: The Municipality received $758,218 of program funds during the fiscal year ended on June 30, 2022. A total of $1,526,593 was included in the schedule of expenditures of federal awards (SEFA) as program expenses. The Municipality did not provide sufficient and appropriate documentation for $373,670 of program expenses. This represents 24% of the expenses reported in the SEFA. The following situations were observed for disbursements totaling $8,579: Context, continued: Situation Number of transactions with situation Disbursement was made before the receipt of the related invoice 1 Duplicity of payments for the same invoice 2 Disbursement was made without the receipt of the related invoice nor the signoff of all required personnel. 1 Program regulation states that local governments are required to use payments from the Fund to cover: 1) Necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (Covid-19), 2) Costs that were not accounted in the governments’ most recently approved budget as of March 27, 2020, and 3) Costs that were incurred during the period that begins on March 1, 2020; and ends on December 31, 2021. Program Closure Report reminds the Municipality that as per 2 C.F.R. 200 and applicable federal regulations to the CRF Program, documentation that serves as evidence of any eligible expenditure reported under the CRF Program should be preserved and maintained for at least five years. We could not ascertain that these disbursements complied with program regulations. The Coronavirus Relief Fund is authorized by the Cares Act, Pub. L. No. 116-136, Division A, Title V (2020) (codified as 42 USC 81 et seq.) as amended by the Consolidated Appropriations Act, 201, Pub. L. No. 116-260 Division N, Title X, Section 1001. 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. Cause: The Municipality failed to provide documentation that served as evidence of eligible expenses for the CRF program for expenses totaling $373,670. The Municipality applied inconsistent internal control and program procedures to disbursement transactions totaling $8,579. 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. Auditor’s recommendation: The Municipality must strengthen internal controls and procedures to assure that disbursement of program funds is properly documented and allowed under program regulations. The Municipality must ensure that all documentation that serves as evidence for eligible expenses be preserved and maintained for at least five years. Views of Responsible officials and corrective actions: Evidence of AAFAF Funds closeout report was provided, there is no issue. Auditor Comments: The Coronavirus Relief Fund (CRF) Transfer Agreement – Assistance Program to Municipalities establishes the following on its grant agreement: 2.3 Recordkeeping: Transferee will maintain its books and records in a manner that will provide Transferor with sufficient detail to review Transferee’s receipts and expenditures relating to the Transfer. Transferee will make such records available for review by Transferor or its agent or designee upon reasonable notice during the Transfer Period and for five (5) years after the termination or expiration of this Agreement. 5.2 Compliance Audit Requirements E.: As applicable, Transferees required to have an audit must ensure the audits are performed in accordance with Generally Accepted Auditing Standards (GAAS) and Government Auditing Standards. The Assistance Program to Municipalities Program Closure Report that management refers to states the following: “Receipt of this notification means that your municipality does not need to provide further notifications or Use of Funds reports since the Program has been closed for your municipality. Your municipality is advised that all documentation that serves as evidence of any eligible expenditure reported under the CRF Program should be preserved and maintained for at least five (5) years, as indicated by federal regulation 2 C.F.R. 200 and applicable federal regulations to the CRF Program. Additionally, please be advised that your municipality will continue to be subject to revisions or audits by local, state or federal agencies pertaining to the use of funds in accordance with federal regulations applicable to the CRF program or the federal regulations regarding Federal Awards, 2 C.F.R. 200. Therefore, your municipality should expect and be prepared for a formal audit by the Government of Puerto Rico or by any pertinent federal agency”. Appendix XI to Part 200 – Compliance Supplement identifies Allowable Costs/Cost Principle as a compliance requirement. Except where otherwise authorized by statue, cost must meet the following general criteria in order to be allowable under federal awards: (1) Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E., and (2) be adequately documented, among other things. The Assistance Program to Municipalities Program Closure Report does not constitute a list of transactions nor adequate supporting documentation of the transactions totaling $373,670. It also does not explain the inconsistencies in supporting documentation observed for disbursements totaling $8,579. Audit Status: Unresolved
Condition: The Municipality failed to identify, within their records, a list of transactions, nor could provide supporting documentation for the disbursement of $1,468,197 of program funds. Documentation for the disbursement of $17,565 of program funds was not identified by the Municipality nor provided for our review. A total of $1,468,197 of program funds were transferred to other accounts of the Municipality. The Municipality did not provide us with supporting documentation for transactions totaling $1,468,197, therefore, we could not ascertain that these transactions complied with program regulations. Context: The Municipality received $6,013,479 of program funds during the fiscal year ended on June 30, 2022. A total of $ 4,810,454 was included in the schedule of expenditures of federal awards (SEFA) as program expenses. The Municipality did not provide sufficient and appropriate documentation for $1,485,762 of program expenses. This represents 31% of the expenses reported in the SEFA. The Municipality indicated that Revenue Replacement was their only project expenditure category in their annual March 2022 SLFRF Compliance Report. Revenue loss in and of itself is not an eligible use. Instead, recipients calculate lost revenue based on the formula provided in the Interim Final Rule and Final Rule to determine the limit for funds that can be used for the provision of government services. Entities are expected to use the direct payments to meet pandemic response needs and rebuild a strong, more equitable economy as the country recovers. Interim and final regulations state that recipients may not use funds to pay interest or principal on outstanding debt, as these expenses would not address the needs of pandemic response or its negative economic impacts. Such expenses would also not be considered provision of government services, as these financing expenses do not directly provide services or aid to citizens. The Coronavirus State and Local Fiscal Recovery Funds program is authorized by sections 602 and 603 of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, Pub. L. No. 117-2 (Mar. 11, 2021). Recipients may use payments from the Fund to among other things, replace lost public sector revenue to provide government services. 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. Further, Coronavirus Local Fiscal Recovery Fund Award terms and conditions state the following regarding the maintenance of and Access to Records 1. Recipient shall maintain records and financial documents sufficient to evidence compliance with section 603© of the Act, Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the foregoing. 2. The Treasury Office of Inspector General and the Government Accountability Office, or their authorized representatives, shall have the right of access to records (electronic and otherwise) of Recipient in order to conduct audits or other investigations. 3. Records shall be maintained by the Recipient for a period of five (5) years after all funds have been expended or returned to the Treasury, whichever is later. Cause: The Municipality failed to provide documentation that served as evidence of eligible expenses for the program for expenses totaling $1,485,762. The Municipality applied inconsistent internal control and program procedures to disbursement transactions totaling $17,565. Effect: Coronavirus Local Fiscal Recovery Fund Award terms and conditions state the following regarding Remedial Actions: In the event of recipient’s noncompliance with section 603 of the Act, other applicable laws, Treasury’s implementing regulations, guidance , or any reporting or other program requirements, Treasury may impose additional conditions on the receipt of a subsequent tranche of future award funds, If any, or take other available remedies as set forth in 2 CFR 200.339 In the case of a violation of section 603 (c ) of the Act regarding the use of funds, previous payments shall be subject to recoupment as provided in section 603 ( C )of the Act. Auditor’s recommendation: The Municipality must strengthen internal controls and procedures to assure that disbursement of program funds is properly documented and allowed under program regulations. The Municipality must ensure that all documentation that serves as evidence for eligible expenses be preserved and maintained for at least five years. Views of Responsible officials and corrective actions: The accounting staff will continue searching for supporting documentation related to the disbursements amounting $17,565. The Coronavirus State & Local Fiscal Recovery Funds (CSLFR) Department of Treasury Final Rule of January 2022., offers a standard allowance for revenue loss of $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation. Recipients that select the standard allowance may use that amount, in many cases their full award, for government services. The Municipality’s management selected the standard allowance, since the amount awarded of CSLFR funds were less than $10 million ad determined that the use of these funds was for governmental services, which are services traditionally provided by recipient governments. The Municipality determined that the payroll expenditures of several departments of the Municipality’s General Fund will be charged to the CSLFR fund as government services. The transfer of $1,468,197 of CSLFR to other Municipality’s bank accounts was to cover the payrolls related to governmental services accounted in the Municipality’s General Fund during the fiscal year 2021-2022. Due to an involuntary omission, these transfers were not recorded as expenditures in the CSLFR fund in the accounting system of the Municipality. To correct this accounting error the Municipality’s management gave instructions to the accounting staff to start reclassifying in the accounting system as soon as possible, these transfers to payroll expenditures accounts in the CSLFR fund. Municipality’s management believes that this finding should be related to an issue of reporting because the Municipality complied with the requirements of activities allowed or unallowed and allowable costs, since the Municipality disbursed CSLFR funds related to governmental services in accordance with the Department of Treasury Final Rule of January 2022. No actions are required related to this finding. Auditor Comments: The U.S Department of The Treasury Coronavirus Local Fiscal Recovery Fund Award Terms and Conditions establishes the following: Recipient shall maintain records and financial documents sufficient to evidence compliance with section 603 ( c ) of the Act, Treasury’s regulations implementing that section, and guidance issued by Treasury regarding the foregoing. Records shall be maintained by Recipient for a period of five (5) years after all funds have been expended or returned to Treasury, whichever is later. 2 CFR 200.302 states 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. Appendix XI to Part 200 – Compliance Supplement identifies Allowable Costs/Cost Principle as a compliance requirement. Except where otherwise authorized by statue, cost must meet the following general criteria in order to be allowable under federal awards: (1) Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E., and (2) be adequately documented, among other things. Although Government Services is an allowable expense category for the CSLFR program, and the Municipality’s management represent to us that the transfers to other accounts within the Municipality correspond to payroll expenditures, the Municipality did not provide us with a list of transactions, nor provided supporting documentation relating to these payroll transactions for the amount of $1,468,197. Program regulations states that records shall be maintained by the Recipient for a period of 5 years after all funds have been expended and federal regulation states that in order to be allowable, costs need to be properly documented. Audit Status: Unresolved
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.
Section III - Federal Award Findings and Questioned Costs Finding 2022-002 Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Foster Care Title IV-E Federal Assistance Listing Number: 93.658 Name of Pass-through Entity: State of California Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Federal Award Identification Number and Year: 2201CAFOST 2022 Criteria: According to 2 CFR, Part 200.302(b)(3), recipients of federal awards are responsible for maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance requirements for the Foster Care Title IV-E grant we noted that management was unable to locate two approved invoices out of 40 items selected for test work. Cause: Due to turnover in the accounting department some accounting records became misplaced and current accounting staff could not locate these records. Effect or Potential Effect: Failure to ensure expenses are being accurately supported and recorded could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs: $54,928 Identification as a Repeat Finding This finding is not a repeat finding. Auditor's Recommendation: We recommend that management implement policies, procedures, and controls to ensure supporting documentation over expenses is properly retained and expenses charged to Federal awards are accurate. Views of Responsible Officials: Management understands the critical importance of maintaining proper documentation to ensure compliance with federal program requirements. To this end, the Organization will implement and reinforce a comprehensive system for retaining all invoices, payment records, and supporting documentation associated with federal awards. Additionally, the Organization will create and maintain a clear record retention policy. Invoice and Payment Documentation: • All invoices related to the federal program will be promptly reviewed and approved by the appropriate personnel to ensure they reflect allowable costs under the specific terms and conditions of the award. • Management will establish clear procedures for the proper recording and classification of payments, ensuring that they are linked directly to the corresponding federal program expenses. • All supporting documentation (e.g., purchase orders, contracts, receipts) will be retained in electronic formats within the accounting system, in accordance with the Organization’s record retention policy, ensuring availability for future audits or reviews. Retention and Accessibility: • The Organization will maintain a secure, organized filing system for all invoices and payments, ensuring that each record is easily accessible for audit purposes. This system will include electronic records that are stored in a centralized database, with restricted access to authorized personnel. • Retained invoices and payment documentation will be kept for the full duration required by federal regulations, typically for a period of at least seven years after the final expenditure report for the federal award has been submitted, or as otherwise required by the specific federal agency. Periodic Reviews and Monitoring: • To ensure ongoing compliance, Management will perform periodic reviews of federal program expenditures and documentation. This will include random sampling of invoices and payment records to confirm that they are complete, accurate, and in compliance with federal regulations. • In the event of any discrepancies or issues identified during these reviews, Management will take immediate corrective action to address the issue and prevent recurrence. By maintaining thorough records of all invoices and payments, the Organization aims to not only comply with federal audit requirements but also to ensure transparency, accountability, and sound financial management of federal funds.
Finding 2022.006: Cash Management - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2022 and 2023, H8DCS35487 - 2021, and H8F40829 - 2023 Criteria In accordance with §200.305, Federal Payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect or Potential Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 9 drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for all 9 drawdowns. Identification of Repeat Finding Yes, see finding 2021-006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
SIGNIFICANT DEFICIENCY 2022-007 - Cash Management Federal Program Information: ALN - 66.458 - Clean Water State Revolving Funds Criteria: The following CFR(s) apply to this finding: 2 CFR section 200.302(b)(6)) & 2 CFR section 200.305(b) (3). Condition: During audit procedures, it was identified that the Town did not have a cash management policy in place. Cause: The Town has experienced turnover in the Treasurer’s position over the past few years, which has delayed the policy implementation. Effect: The Town may not have adequate policy and procedures in place to safeguard its most liquid assets. Identification of Questioned Costs: None identified. Context: The population consisted of 12 out of the 30 pay requisition deposit of reimbursements from the fiscal year were examined. Out of the 12 selections only 4 deposits had backup documentation and those 4 were not properly recorded. The other 8 were lacking proof that deposits were recorded properly. Repeat Finding: This is a repeat finding of 2021-006. Recommendation: It is recommended that the Town adopt a cash management policy that follows the Uniform Guidance and that the Town implement internal control processes and procedures to ensure that the adopted policy is followed. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and a version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Town of Livermore Falls.
Federal Agency: Department of Housing and Urban Development and Department of Veterans Affairs Federal Program Name: Emergency Solutions Grant Program and VA Homeless Providers Grant and Per Diem Program Assistance Listing Number: 14.231 and 64.024 Federal Award Identification Number and Year: E20DW37001-2022 and ODMH543-1306-659-PD-21 Pass-Through Agency: North Carolina Department of Health and Human Services, Division of Aging and Adult Services Pass-Through Number(s): 00041416 Award Period: 7/29/2020 – 6/30/2022 and 10/1/2021 – 9/30/2022 Type of Finding: - Material Weakness in Internal Control over Compliance - Material Noncompliance (Modified Opinion) Criteria or specific requirement: In accordance with 2 CFR 200.302(b)(3), the recipient’s financial management system must maintain records sufficient to identify the amount, source, and expenditure of federal funds for federal awards, These records must contain information necessary to identify federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. In accordance with the Compliance Supplement, Part 6 – Internal Control, 2 CFR section 200.303 requires that non-Federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-Federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable. In accordance with 2 CFR 200.430(g), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must: (1) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) Be incorporated into the official records of the recipient (3) Reasonably reflect the total activity for which the employee is compensated. Condition: During our testing, we noted the Organization did not have adequate controls to ensure that expenditures of federal awards were properly supported, reasonably reflective of the work performed, and properly reviewed and approved. Questioned costs: Assistance listing number: 14.231 Federal award identification number: E20DW37001-2022 Known questioned costs: $18,419 Assistance listing number: 64.024 Federal award identification number: ODMH543-1306-659-PD-21 Known questioned costs: $49,676 Context: During our testing, we noted the following related to the VA Homeless Providers Grant and Per Diem Program: 40 out of 40 payroll transactions tested for allowable costs and allowable activities were not allocated based on actual time worked on the grant and lacked adequate records. 11 out of 40 tested for allowable costs and allowable activities did not have evidence showingexpenditures were allowable under the grant. 17 out of 40 tested for allowable costs and allowable activities lacked evidence of review and approval. During our testing, we noted the following related to the Emergency Solutions Grant Program: 18 of 40 tested for allowable costs and allowable activities lacked evidence showing the expenditures were allowable under the grant. 8 out of 11 payroll transactions tested for allowable costs and allowable activities were not allocated based on actual time worked on the grant and lacked adequate records. Cause: The Organization’s controls were not sufficient to ensure that expenditures of federal funds were supported, reasonably reflecting the work performed under the program, reviewed and approved, and only for allowable costs and allowable activities. Effect: The Organization could have incurred expenses that were not allowable under the grant beyond those identified. Repeat Finding: Yes Recommendation: We recommend the Organization develop a system of internal controls to ensure that salaries and related payroll expenses are tracked to reasonably reflect the actual time spent working on the programs. In addition we recommend that management retain all documents including evidence of review and approval for all expenditures of federal funds until the latter of the legally required retention period or completion of required audits. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ?200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted the Organization is not in compliance with requirements related to the reporting of grants. Questioned costs: None Context: During our testing, we noted the following exceptions: ? The Organization did not complete the indirect costs section of the annual Federal Financial Report submitted during the fiscal year. Auditor noted a total of $74,062 was drawn in indirect costs for fiscal year 2022. ? The Organization is not reporting the action in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Cause: The Organization lacks established internal controls and procedures over financial grant management to ensure submitted reports are complete, agree to supporting spreadsheets, submitted timely, and properly maintained in the files of the Organization. Effect: The auditor noted instances of noncompliance. Noncompliance can result in delayed reimbursement of eligible Federal expenditures or potential loss of Federal funding. Repeat Finding: Yes ? 2021-003 Recommendation: ? We recommend the Organization review the instructions for completion of the federal financial reports with training provided to the program staff preparing and reviewing the federal financial reports to ensure submitted reports are complete and timely. ? Specific to special reports for FFATA, we recommend the Organization provide training on the requirements to those employees responsible for reporting the action in FSRS. Views of responsible officials: The Organization was unaware of the FFATA reporting requirement. The Organization will register and submit the FFATA. Also, the Organization failed to report the indirect costs on the FFR. The Organization has notified the responsible parties to avoid future occurrences. The FFR?s have been completed to report indirect costs separately in fiscal year 2023. The FFATA was submitted in fiscal year 2023 and will be updated yearly.
Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ?200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted the Organization is not in compliance with requirements related to the reporting of grants. Questioned costs: $1,062,184 Context: During our testing, we noted the following exception: ? The Organization did not reduce the PRF expenses claimed by the amounts reimbursed by Medicare through the cost report. Auditor calculated the average amount reimbursed by MCR and noted an average MCR reimbursement rate of 26.8% and 28.1% in fiscal years 2021 and 2020, respectively. The calculated total of costs reimbursed by Medicare through the cost report is $1,062,184. Cause: The Organization lacks established internal controls and procedures over financial grant management to ensure submitted reports are complete, agree to supporting spreadsheets, submitted timely, and properly maintained in the files of the Organization. Effect: The auditor noted instances of noncompliance. Noncompliance can result in delayed reimbursement of eligible Federal expenditures or potential loss of Federal funding. Repeat Finding: No. Recommendation: We recommend the Organization evaluate its financial reporting processes and controls to determine whether additional controls over the preparation of any Provider Relief Fund reports are needed to ensure the reports are prepared in line with the Provider Relief Fund guidelines. Views of responsible officials: The Organization missed reducing the costs claimed against PRF by the amounts reimbursed through the Medicare cost report. The Organization did have additional lost revenues though that would offset these costs claimed and wouldn?t result in a repayment of the funds. We would look to HRSA for guidance on how you would like us to update our Phase 1 PRF report or how you would like to see this corrected. Also, the CFO will listen to webinars to receive education for Phase IV funds that were received by the Organization to ensure compliance with the reporting requirements.
Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ?200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted the Organization is not in compliance with requirements related to the reporting of grants. Questioned costs: None Context: During our testing, we noted the following exceptions: ? The Organization did not complete the indirect costs section of the annual Federal Financial Report submitted during the fiscal year. Auditor noted a total of $74,062 was drawn in indirect costs for fiscal year 2022. ? The Organization is not reporting the action in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Cause: The Organization lacks established internal controls and procedures over financial grant management to ensure submitted reports are complete, agree to supporting spreadsheets, submitted timely, and properly maintained in the files of the Organization. Effect: The auditor noted instances of noncompliance. Noncompliance can result in delayed reimbursement of eligible Federal expenditures or potential loss of Federal funding. Repeat Finding: Yes ? 2021-003 Recommendation: ? We recommend the Organization review the instructions for completion of the federal financial reports with training provided to the program staff preparing and reviewing the federal financial reports to ensure submitted reports are complete and timely. ? Specific to special reports for FFATA, we recommend the Organization provide training on the requirements to those employees responsible for reporting the action in FSRS. Views of responsible officials: The Organization was unaware of the FFATA reporting requirement. The Organization will register and submit the FFATA. Also, the Organization failed to report the indirect costs on the FFR. The Organization has notified the responsible parties to avoid future occurrences. The FFR?s have been completed to report indirect costs separately in fiscal year 2023. The FFATA was submitted in fiscal year 2023 and will be updated yearly.
Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the non-Federal entity?s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-Federal entity must provide accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements. According to ?200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted the Organization is not in compliance with requirements related to the reporting of grants. Questioned costs: $1,062,184 Context: During our testing, we noted the following exception: ? The Organization did not reduce the PRF expenses claimed by the amounts reimbursed by Medicare through the cost report. Auditor calculated the average amount reimbursed by MCR and noted an average MCR reimbursement rate of 26.8% and 28.1% in fiscal years 2021 and 2020, respectively. The calculated total of costs reimbursed by Medicare through the cost report is $1,062,184. Cause: The Organization lacks established internal controls and procedures over financial grant management to ensure submitted reports are complete, agree to supporting spreadsheets, submitted timely, and properly maintained in the files of the Organization. Effect: The auditor noted instances of noncompliance. Noncompliance can result in delayed reimbursement of eligible Federal expenditures or potential loss of Federal funding. Repeat Finding: No. Recommendation: We recommend the Organization evaluate its financial reporting processes and controls to determine whether additional controls over the preparation of any Provider Relief Fund reports are needed to ensure the reports are prepared in line with the Provider Relief Fund guidelines. Views of responsible officials: The Organization missed reducing the costs claimed against PRF by the amounts reimbursed through the Medicare cost report. The Organization did have additional lost revenues though that would offset these costs claimed and wouldn?t result in a repayment of the funds. We would look to HRSA for guidance on how you would like us to update our Phase 1 PRF report or how you would like to see this corrected. Also, the CFO will listen to webinars to receive education for Phase IV funds that were received by the Organization to ensure compliance with the reporting requirements.
2022-012 Financial Statement Reconciliations/Tie-In Procedures Material Weakness This is a repeat finding. The prior-year’s auditing finding number is 2021-012. Condition: A weakness existed in the overall reconciliation/tie-in procedures performed over the Housing Authority’s financial statement accounts for the fiscal year ended March 31, 2022. Financial accounts were not reconciled on a timely, monthly basis. The major areas where reconciliation procedures were weak included: A) Bank Reconciliations B) Grant Receivables C) Account Receivables and associated allowance for doubtful accounts D) Capital Assets E) Accounts Payable F) Payroll and Other Current Liabilities 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 4 adjusting journal entries be made to the financial statements for fiscal year ending March 31, 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. Recommendation: The Housing Authority should adopt written reconciliation and tie-in procedures into its financial policies and procedures manual. These policies should require timely reconciliations to take place as defined under policy. Views of Responsible Officials: See Corrective Action Plan.
#2021-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2CFR 200.303) Travel (2CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with Uniform Guidance. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that Organization’s expenses are not in accordance with UGG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with Uniform Guidance. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2020-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with Uniform Guidance. View of responsible officials and planned corrective action Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.
#2021-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2CFR 200.303) Travel (2CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with Uniform Guidance. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that Organization’s expenses are not in accordance with UGG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with Uniform Guidance. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2020-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with Uniform Guidance. View of responsible officials and planned corrective action Policies will be placed and adopted by the agency that meet the UG code. These policies will be placed in the fiscal manual. The fiscal manual will be created by using federal guidelines and by using the DDAP fiscal manual as guidance.
Finding 2021-007 Program: Office for Coastal Management Federal Financial Assistance Listing: 11.473 Federal Grantor: U.S. Department of Commerce Passed-through: National Fish and Wildlife Foundation Award No. and Year: 0318.19.070225 (2020) Compliance Requirements: Reporting Type of Finding: Material Non-Compliance/Material Weakness Criteria: 2 CFR 200.302(b)(2) - Requirements state that there must be accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. Condition: Expenditures for one financial report that was selected for testing did not agree with the expenditures that were reported on the SEFA and recorded in the General Ledger (difference of $11,791), based on the dates requested in the report. CFSC did not include known operational expenses for the period that were program costs at the time the report was due, which resulted in underreporting expenditures by $11,791. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was not used. We selected all four reports filed during year. The condition noted above was identified during our procedures over CFSC’s reporting provisions. Repeat Finding from Prior Year: No Effect: CFSC did not include all known expenditures at the time the report was submitted to the National Fish and Wildlife Foundation, increasing the risk of noncompliance. Cause: CFSC’s procedures did not consistently ensure that all known expenditures at the time the report was submitted were included. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that all known expenditures are included at the time reports are required to be submitted. Views of Responsible Officials and Planned Corrective Actions: See Separate Corrective Action Plan.
Finding 2021-003: Reconciliation of Accounts Material Weakness Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): According to 2 CFR 200.508 "Auditee Responsibilities" the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 "Financial statements"). Title 2 CFR 200.510 "financial statements" requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee's financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 "Financial management", the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. Condition: The year-end schedules for federal grants receivable, and for net assets, and for vacation payable were not reconciled and needed to be revised and updated. Cause: Errors in transferring balances between years occurred, which impacted carry-over amounts and the ending balances as of 12/31/2021. Related to vacation payables, the schedule had not been properly adjusted to account for the number of days in the last pay period. Effect or Potential Effect: Three federal grant accounts were overdrawn as of 12/31/2021, creating a liability to the federal government. The related grant receivable and liability balances were not properly stated before adjustment as a result. Questioned Costs: $80,978. Identification as a Repeat Finding, if Applicable: 2020-003 Recommendation: We recommend AAPT staff prepare schedules used to prepare entries into the accounting information system or which the information in the schedules will otherwise be used to initiate financial transactions, and the transactions and schedules be reviewed by a supervisor. Views of Responsible Officials and Planned Corrective Actions: The outstanding liability due to NSF of $80,978 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by July 31,2024. The senior accountant will be trained to prepare entries previously prepared by the CFO The senior accountant will reconcile accounts, and provide updated current schedules. The CFO will review and approve the entries and schedules prepared by the Senior accountant. Anticipated Completion Date: 05/01/2024 Responsible Official: Michael Brosnan, CFO