2021-006 - 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 4 out of 10 pay requisites deposit of reimbursements from the fiscal year were examined. Out of the 4 selections only 1 deposit had backup documentation. The other 3 were lacking prove that deposits were recorded properly. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a cash management policy that follows the Uniform Guidance, and that the Unit implements 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.
2021-006 - 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 4 out of 10 pay requisites deposit of reimbursements from the fiscal year were examined. Out of the 4 selections only 1 deposit had backup documentation. The other 3 were lacking prove that deposits were recorded properly. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the Unit adopt a cash management policy that follows the Uniform Guidance, and that the Unit implements 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.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.
Condition - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis of the related transactions prepared by the Municipality’s consultants for financial statements and Schedule of Expenditures of Federal Awards purposes for the fiscal year ended June 30, 2021, $1,082,613 has been expended or transferred to the general fund to cover eligible expenses under the terms allowed by the CDL grant. As a consequence of these conditions, compliance with reporting requirements established by the grantor entity, and related internal controls, could not be verified. Criteria - Code of Federal Regulations, 44 CFR Section 206, establishes, among other requirements, that the borrower must maintain complete and accurate accounts and other records for the program in accordance with the CDL requirements and regulations. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the non-Federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. Cause - The Municipality has not properly established a formal recording system to identify and itemize the transactions that must be reported as eligible expenditures under the expense / cost category allowed by the provisions of the CDL. Also, there is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. Effect - The Municipality is exposed to the Grantor questioning the use of funds and affecting aspects and amounts associated with the qualification for the Loan Cancellation, if eligible at the end of the term to request this cancellation. Recommendation - We recommended management to prepare the necessary analyses, according to the requirements of the CDL, to identify and detail the expenditures that have been charged against the CDL funds. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
Condition - The Municipality’s staff could not provide us with the officially prepared and certified reports that supported compliance with the filing or submission of reports and financial information, as required by federal award and regulatory agreements. Likewise, reconciliations were not provided between the information used to prepare the required and submitted reports with the formal information presented and accounted for in the official Municipality’s accounting system. According to an analysis of the related transactions prepared by the Municipality’s consultants for financial statements and Schedule of Expenditures of Federal Awards purposes for the fiscal year ended June 30, 2021, $907,650 has been expended under the terms allowed by the Disaster Grants. As a consequence of these conditions, compliance with reporting requirements established by the grantor entity, and related internal controls, could not be verified. Criteria - Code of Federal Regulations, 44 CFR Section 206, establishes, among other requirements, that the borrower must maintain complete and accurate accounts and other records for the program in accordance with the Disaster Grants requirements and regulations. Also, as established in the 2 CFR Section 200.302 (a) of the Uniform Guidance, the non-Federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, 2 CFR Section 200.403, states that otherwise authorized by statue, costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity and be adequately documented. Cause - The Municipality has not properly established a formal recording system to identify and itemize the transactions that must be reported as eligible expenditures under the expense / cost category allowed by the provisions of the Disaster Grant. Also, there is a lack of knowledge and training to the personnel assigned to the management and reports preparation, as required by this federal award. Additionally, the Municipality does not have an adequate monitoring and internal control regarding the activity, filing and custody of reports, as required by the federal awards and the pass-through entity, and in a way that documents and supports the compliance with reporting requirements. Effect - The program is exposed to not being in compliance with the Reporting Requirements as established in agreement. Also, the Municipality is exposed to the Grantor questioning the use of funds. Recommendation - We recommended management to prepare the necessary analyses, according to the requirements of the Grant, to identify and detail the expenditures that have been charged against the grant allowable expenditures. Also, it is absolutely necessary for the Municipality to design, document, establish and provide the necessary and required training, including guidelines and procedures, to all personnel who work directly or indirectly with the management of these federal funds.
Financial Management System- (Material Weakness) Cluster: Not applicable Sponsoring Agency U.S. Department of Housing and Urban Development Award Name Home Investment Partnerships Program Award Number Not applicable Assisting Listing Number 14.239 Award Year FY 2002 Pass-through entity Not applicable 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: None noted 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.
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. 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 3rd and 4th fiscal quarters for the GEER grant and the 4th fiscal quarter for the ESSER II grant, 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 2021-005) and did not reconcile to the separate spreadsheets maintained by the School District. 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. 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 3rd and 4th fiscal quarters for the GEER grant and the 4th fiscal quarter for the ESSER II grant, 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 2021-005) and did not reconcile to the separate spreadsheets maintained by the School District. 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. 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 3rd and 4th fiscal quarters for the GEER grant and the 4th fiscal quarter for the ESSER II grant, 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 2021-005) and did not reconcile to the separate spreadsheets maintained by the School District. 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. 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: 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. 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: 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. 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: 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. 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: 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. 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 3rd and 4th fiscal quarters for the GEER grant and the 4th fiscal quarter for the ESSER II grant, 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 2021-005) and did not reconcile to the separate spreadsheets maintained by the School District. 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.
Criteria Per 2 CFR 200.302 (b)(7) a non-federal entity must establish written procedures for determining the allowability of costs in accordance with Subpart E – Cost Principles and the terms and conditions of the Federal award. Per 2 CFR 200.303, a 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 the 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). Article 12 of the Act 83 of May 2, 1941, as amended, establishes that the Authority must have an accounting system that provides for adequate control and statistical records of all income and expenses from, administered or controlled by the Authority. Condition and Context During our review of the internal controls over compliance, we noted that the following: • Authority did not have written procedures or formal policies to ensure compliance over the Allowable Costs and Cost Principles, Period of Performance, Matching and Reporting requirements.• During our test work over internal controls over compliance for activities allowed and cost principles requirements, we noted that the Authority implemented a system of compiling the relevant data elements, including allowed expenditures for all projects. However, there was no control addressing the completeness and accuracy of the allowed expenditures. Cause and Possible Asserted Effect Management did not establish proper internal controls to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Absence of formal policies and procedures could cause the Authority to fall in noncompliance with federal awards. Also, the Authority’s processes and controls are not designed to ensure proper review of supporting documentation to meet the compliance requirements of the Federal Grant. Not having formal processes and controls caused that in multiple occasions the Grantor returned claims submitted due to lack of support documentation. Questioned Cost There were no questioned costs associated with the finding. Whether the Sampling was a Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Prior Year Repeat Finding A similar finding was reported in the prior year’s audit as finding 2020-008. Recommendation Management must establish written procedures and formal policies to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. View of Responsible Officials Management acknowledges the findings and has implemented a corrective action plan to enhance compliance with Federal awards. This plan includes developing Standard Operating Procedures (SOPs) for grant management activities, identifying, and documenting existing internal controls, and maintaining constant communication with stakeholders to prevent material non-compliance. Additionally, PREPA will provide training to staff on the new SOPs and establish a monitoring mechanism to continuously assess and improve the effectiveness of these controls. The corrective action plan, supervised by Mr. Ezequiel Nieves from the PREPA Disaster Funding Management Office, is expected to be completed by July 2025. Management is committed to addressing deficiencies, ensuring that processes and controls are robust and effective, and that Federal awards are managed transparently and in full compliance with all regulatory requirements. The estimated date of completion is expected to be in July 2025. Responsible Party - Mr. Ezequiel Nieves - PREPA Disaster Funding Management Office, Finance Department. Effective June 1, 2021, the Authority transitioned the management and operation of its transmission and distribution network as well as certain back-office functions, including billing, collections and accounting, to a third party. The third-party operator is reviewing operating procedures and controls within its responsibilities to make the necessary improvements. Management will work to address these findings with the assistance of the third-party operators, where applicable. Also, effective July 1, 2023, the Authority transitioned the management and operation of its generation assets as well as certain back- office functions to a third party. The third-party operator is reviewing operating procedures and controls within its responsibilities to make the necessary improvements. In addition, the Authority will also be implementing and monitoring corrective actions taken by the new generation segment operator.
FINDING 2021-002 – Lack of Written Policies for Federal Grants (Repeated from Prior Year Findings 20-003, 19-004, 18-003 and 17-002) Federal Program: Individuals with Disabilities Education Act (IDEA) Improvement Grant - Part D Project No: 20-4631-RN and 21-4631-RN Federal Assistance Listing Number: 84.323A Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), contained in 2 CFR Part 200, became effective for all federal award programs administered by the Regional Office of Education #47 that were issued on or after December 26, 2014. Specifically, the Uniform Guidance (2 CFR 200.302(b)(7)) requires the Regional Office to have written procedures related to cash management and for determining the allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. Condition: As of April 2021, Regional Office developed, but did not implement written procedures concerning cash management, the determination of allowability of costs in accordance with Subpart E – Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. For the period of July 2020 through March 2021 the Regional Office utilized informal procedures in which each purchase made or cost allocated to the IDEA – Improvement Grant - Part D was reviewed for allowability by an individual with knowledge of the budget, allowable costs and activities, and the cash management requirements. The allowability determinations were based on the amounts included in the budgets for the IDEA – Improvement Grant - Part D approved by, and the grant periods set by, the Illinois State Board of Education. Questioned Costs: None Context: The Regional Office of Education #47 expended $1,919,044 of federal awards in total during fiscal year 2021, including $978,533 for the IDEA –Improvement Grant - Part D. Effect: Not having written procedures for the full period under review concerning cash management and cost principles increases the risk that grant payments will not be requested on the reimbursement basis and unallowable costs will be allocated to federal award programs. Cause: Regional Office management indicated they developed the written procedures late into the fiscal year, and were unable to fully implement the Uniform Guidance during the full fiscal year. Recommendation: We recommend the Regional Office implement written procedures to comply with the requirements related to cash management for determining the allowability of costs in accordance with Subpart E –Cost Principles of the Uniform Guidance and the terms and conditions of the federal award. Management’s Response: Effective April 2021, the Regional Office has developed written policies and procedures related to the Uniform Guidance.
Finding 2021-006: Cash Management - Material Weakness Grantor: 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 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 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 The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. 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.
Finding 2021-006: Cash Management - Material Weakness Grantor: 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 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 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 The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. 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.
Finding 2021-006: Cash Management - Material Weakness Grantor: 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 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 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 The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. 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.
Finding 2021-006: Cash Management - Material Weakness Grantor: 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 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 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 The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. 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.
Finding 2021-006: Cash Management - Material Weakness Grantor: 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 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 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 The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. 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.
Finding 2021-006: Cash Management - Material Weakness Grantor: 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 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 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 The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected seven drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Yes, see finding 2020-006. 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.
Condition: The Bureau lacks adequate financial management processes to produce timely, accurate, and complete financial information required for the Statement, SEFA, and federal reporting, including incomplete subsidiary records, delayed reconciliations, and insufficient program-level reporting. Criteria: 2 CFR 200.302 and 200.328 require accurate, current, and complete financial reporting and timely submission of required reports. Cause: Insufficient internal controls, lack of monitoring, and inadequate coordination between fiscal and program staff. Effect: Delays in required federal reporting, errors in financial information, and noncompliance with Uniform Guidance deadlines, increasing the risk of unreliable reporting. Questioned Costs: None. Context: The condition has affected multiple audit cycles but was not reported as a finding in the prior year’s final audit. Recommendation: Strengthen internal controls over financial management, improve subsidiary records and reconciliations, implement a formal reporting calendar, enhance coordination among staff, and provide training on PRIFAS, UG requirements, and reporting procedures to ensure accurate and timely reporting.
Condition: The Bureau did not provide evidence of having prepared or submitted the required quarterly Federal Financial Reports (SF-425) or equivalent COR3 financial status reports for FEMA Public Assistance Program ALN 97.036; despite repeated audit requests, no SF-425s or alternative reports demonstrating cumulative expenditures, federal share, or matching funds were made available, and therefore compliance with federal and pass-through reporting requirements could not be verified. Criteria: Under 2 CFR 200.328(a) and 200.302(b)(5), recipients and subrecipients must submit accurate, complete, and timely financial reports as prescribed by the awarding agency, including quarterly SF-425 (or COR3) reports; reporting deadlines for SF-425s are generally January 30, April 30, July 30, and October 30. Context: During the audit, the Bureau did not provide SF-425 reports for FEMA grants, preventing the auditors from verifying whether reports were prepared, submitted timely, or reconciled to PRIFAS accounting records; similar deficiencies were identified in prior audits (Findings 2016-03, 2019-06, and 2020-05), indicating the condition remains uncorrected and systemic. Cause: The Bureau lacks effective internal controls assigning responsibility for preparing, reviewing, and submitting SF-425 or COR3 financial reports, and there is no monitoring mechanism to ensure reports are completed and submitted by required due dates. Effect: Failure to prepare and submit required financial reports constitutes noncompliance with Uniform Guidance and FEMA/COR3 grant conditions, impedes grantor oversight of project progress and expenditure status, increases the risk of questioned costs or delayed reimbursements, and may result in sanctions such as suspension of funding or withholding of future obligations until reports are submitted and accepted. Recommendation: The Bureau should establish and enforce written procedures to ensure SF-425 or COR3 financial reports are prepared, reviewed, and submitted within prescribed deadlines, assign reporting responsibilities to specific personnel, implement a monitoring calendar to track compliance, and ensure reports are supported by reconciled accounting data from PRIFAS and other reporting systems. Questioned Costs: None. Management Response: See corrective action plan.
Condition: During our review of Federal Financial Reports (SF-425) for the Emergency Management Performance Grant (EMPG) covering program years 2018, 2019, and 2020, we noted multiple reporting deficiencies across all four reports reviewed, including late submissions (in some cases more than one year late), undated reports with no evidence of submission timeliness, incomplete financial data where federal cash receipts or disbursements were reported as zero despite active grant activity, inconsistent or missing expenditure information, incorrect or missing recipient share (matching funds), unreconciled balances between SF-425 reports and PRIFAS or the SEFA, lack of supporting documentation or reconciliation schedules, and no evidence of internal review or approval controls. Criteria: Under 2 CFR 200.327–200.329 and 2 CFR 200.302(b)(6), non-Federal entities must submit accurate, complete, timely performance and financial reports supported by accounting records; SF-425 reports must reflect financial results of each award, be supported by the accounting records, include federal and recipient share, and be submitted no later than 30 days after the end of the reporting period. Context: All four EMPG SF-425 reports reviewed exhibited at least one of the identified deficiencies, indicating systemic noncompliance with federal reporting requirements and insufficient monitoring over the reporting process. Cause: The Bureau lacks effective internal controls and supervisory review over the preparation, reconciliation, and submission of SF-425 reports, including inadequate coordination between accounting and grants management areas and no formal process to ensure reconciliation to PRIFAS accounting data prior to submission. Effect: The absence of timely, accurate, and reconciled financial reporting increases the risk of misstated federal program expenditures, may result in grantor sanctions such as withholding or suspension of federal funds, and impairs the Bureau’s ability to demonstrate compliance with Uniform Guidance reporting requirements. Recommendation: Establish and document formal procedures to ensure timely preparation, review, and submission of SF-425 reports; implement a reconciliation checklist requiring agreement of reported data to PRIFAS and SEFA records; ensure each report includes federal and recipient share, drawdown activity, and unliquidated obligations; designate an official responsible for review and approval prior to filing with retained evidence of submission; and provide staff training on federal reporting requirements under 2 CFR 200.327–200.329. Questioned Costs: None. Management Response: See corrective action plan.
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: E20DW37001-2021 and ODMH543-1095-659-CM-20 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 - 6/30/2021 and 10/1/2019 - 9/30/2021 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: E20DW37001-2021 Known questioned costs: $19,334 Assistance listing number: 64.024 Federal award identification number: ODMH543-1095-659-CM-20 Know questioned costs: $51,247 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. 27 out of 40 tested for allowable costs and allowable activities did not have evidence showing expenditures were allowable under the grant 25 out of 40 tested for allowable costs and allowable activities lacked evidence of review and approval 17 out of 17 tested for period of performance did not have evidence of review and approval 5 out of 17 tested for period of performance lacked appropriate supporting documentation showing the expenditures related to the grant During our testing, we noted the following related to the Emergency Solutions Grant Program: 20 of 40 tested for allowable costs and allowable activities lacked evidence showing the expenditures were allowable under the grant 3 of 40 tested for allowable costs and allowable activities were not allowable under the grant. 6 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 Organizations 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: No 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.
2021-012 Financial Statement Reconciliations/Tie-In Procedures Material Weakness This is a repeat finding. The prior-year’s auditing finding number is 2020-012. 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, 2021. 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, 2021. 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.
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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
Finding 2020-003: 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, 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 12/31/2020. 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 12/31/2020, 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: $77,113. Identification as a Repeat Finding, if Applicable: 2019-002 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 $73,057 will be reimbursed when AAPT files the next drawn down request. Anticipated date of drawn down will be by April, 30,2024 The remaining balance was earned in 2021. 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