Department of the Health and Human Services Federal Assistance Listing #93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: BHD, LLC calculated their indirect cost rate based on the total grant budget and claimed an equal amount of indirect costs per month instead of calculating the indirect cost rate per direct expenditures for each month. Cause: BHD, LLC did not have an internal control process in place to ensure the correct amounts of indirect costs were requested based on the direct costs for the same period. Effect: Without an effective internal control process in place, improper costs could be charged to the program. Questioned Costs: None reported. Context: A nonstatistical sample of 4 out of 12 indirect expenditures were selected for testing. Repeat Finding from Prior Years: No Recommendation: We recommend BHD, LLC enhance internal control procedures to ensure the indirect cost rate is applied against the monthly direct costs when requesting program reimbursements. Views of Responsible Officials: Historically, the indirect cost received by this grant has not been dependent of the direct expenditures. Based on verbal conversations with the HRSA grant project manager, requesting reimbursement for the indirect costs evenly over the year based on the budget submitted was acceptable. Therefore, the accounting treatment has been reflective of that.
Inability to provide sufficient supporting documentation of internal controls over certain compliance requirements related to the federal program. Criteria: According to Uniform Guidance (2 CFR § 200.303a), both recipients and subrecipients of federal funding are required to establish, document, and maintain effective internal controls over federal awards. Condition: The Organization lacks a consistent and timely system for documenting internal controls over certain compliance requirements of the federal program. Cause: The federal program was new to the Organization during the year and, as the subrecipient of the federal award, management and program staff relied on the pass-through entity's internal controls and monitoring over compliance. As a result, at the subrecipient level, the Organization failed to consistently document internal controls over certain compliance requirements. Effect: The Organization provided short-term financial assistance for rent to various clients in the year under audit. For multiple payments, the Organization was unable to provide documentation of its internal controls over compliance as it relates to the U.S. Department of Housing and Urban Development's rent reasonableness standard (24 CFR 982.507). Recommendation: We recommend that the Organization formally obtain and retain documentation of internal control procedures over compliance requirements for federal programs it administers. Specifically, the Organization should obtain and retain sufficient documentation to demonstrate compliance with the U.S. Department of Housing and Urban Development's rent reasonableness standard. Additionally, program staff should be trained on these procedures and a periodic internal review process should be implemented to confirm that documentation meets all Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the material weakness and related reommendation and will incorporate the aforementioned recommendation into the federal program internal control processes.
2024 – 002 Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Numbers: 84.063 and 84.268 Federal Award Identification Number and Year: P268K231902, P063P231902, grants were awarded within the 2022-23 and 2023-24 award years. Award Period: September 1, 2023, through August 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Code of Federal Regulations, 34 CFR 685.309(b) states that: 1) Schools must have some arrangement to report student enrollment data to NSLDS through an enrollment roster file. The school is required to report changes in the student’s enrollment status, the effective date of the status, and an anticipated completion date. Also, the Code of Federal Regulations, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless if they receive aid from the institution or not. 2.) Schools must have some arrangements to report student program enrollment effective date and status to NSLDS. The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to ensure compliance with federal laws, regulations and program compliance requirements. Condition and Context: During our testing of NSLDS Enrollment Reporting, we noted that 1.) the incorrect enrollment effective date was reported to NSLDS for 2 out of the 40 students tested. 2.) the incorrect program enrollment effective date was reported to NSLDS for 1 out of the 40 students tested. Questioned Costs: N/A Cause: The College policies and procedures did not ensure that the enrollment effective dates were accurately reported to NSLDS. Effect: 1) The enrollment effective date reported to NSLDS is used to determine when the student’s grace period should begin. By not reporting a correct effective date, the grace period begin date for the student will be incorrect. 2) The program enrollment effective date reported to NSLDS is used to determine the student’s 150%limit for direct loans as well as when grace period should begin. By not reporting the correct status, the calculation of the 150% would be incorrect and the grace period begin date would be incorrect. Repeat Finding: No. Recommendation: The College should evaluate their procedures and review policies surrounding reporting enrollment effective dates and program enrollment effective dates NSLDS. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
2024 – 002 Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Numbers: 84.063 and 84.268 Federal Award Identification Number and Year: P268K231902, P063P231902, grants were awarded within the 2022-23 and 2023-24 award years. Award Period: September 1, 2023, through August 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Code of Federal Regulations, 34 CFR 685.309(b) states that: 1) Schools must have some arrangement to report student enrollment data to NSLDS through an enrollment roster file. The school is required to report changes in the student’s enrollment status, the effective date of the status, and an anticipated completion date. Also, the Code of Federal Regulations, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless if they receive aid from the institution or not. 2.) Schools must have some arrangements to report student program enrollment effective date and status to NSLDS. The Code of Federal Regulations, 2 CFR 200.303, non-Federal entities receiving Federal awards are required to establish and maintain internal controls designed to ensure compliance with federal laws, regulations and program compliance requirements. Condition and Context: During our testing of NSLDS Enrollment Reporting, we noted that 1.) the incorrect enrollment effective date was reported to NSLDS for 2 out of the 40 students tested. 2.) the incorrect program enrollment effective date was reported to NSLDS for 1 out of the 40 students tested. Questioned Costs: N/A Cause: The College policies and procedures did not ensure that the enrollment effective dates were accurately reported to NSLDS. Effect: 1) The enrollment effective date reported to NSLDS is used to determine when the student’s grace period should begin. By not reporting a correct effective date, the grace period begin date for the student will be incorrect. 2) The program enrollment effective date reported to NSLDS is used to determine the student’s 150%limit for direct loans as well as when grace period should begin. By not reporting the correct status, the calculation of the 150% would be incorrect and the grace period begin date would be incorrect. Repeat Finding: No. Recommendation: The College should evaluate their procedures and review policies surrounding reporting enrollment effective dates and program enrollment effective dates NSLDS. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
Finding 2024-001: Cash Management Federal Agency: U.S. Department of Education Federal Program: Federal Direct Student Loans (ALN 84.268) Award Year: September 1, 2023 to August 31, 2024Criteria or Specific Requirement 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 Federal statutes, regulations, and the terms and conditions of the Federal award. Per 34 CFR 685.300(b)(50), schools participating in the Direct Loan program are required to perform monthly Direct Loan reconciliations. Electronic Announcements DL-22-07 and GENERAL-22-86 explain that a school must reconcile the funds it received from G5 with actual disbursement records the school submitted to Common Origination and Disbursement (COD). Each month, COD sends the school a School Account Statement, which is the Department of Education’s (ED’s) official record of the school’s cash and disbursement records and identifies the difference between the net draws from G5 and the actual disbursement information reported to COD by the school. The school is required to account for any differences by reconciling ED’s records (School Account Statements) with the school’s financial and business records. Condition Found The reconciliation between ED’s records (School Account Statements) and the school’s financial and business records were prepared timely throughout the year; however, the differences identified in the reconciliation were not accounted for and no review or segregation of duties was documented as part of that process. Cause and Possible Asserted Effect The control to ensure that the reconciliation between the ED’s records and the school’s financial and business records was performed and reviewed by an individual separate than that who prepared it and that any differences identified were investigated was not operating effectively. As a result and based on the documentation provided, the monthly reconciliations were not reviewed by an individual separate than that who prepared them and any differences identified during the reconciliation process were not investigated. Questioned Costs None. Whether the Sample Was a Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding Was a Repeat Finding in the Immediately Prior Audit Not at repeat finding. Recommendation We recommend that the University strengthen controls over the management review process over the monthly reconciliations between the ED’s records and the school’s financial and business records to ensure there is a segregation of duties in the review and approval process, and any differences within management’s prescribed level of precision are investigated and documented.View of Responsible Officials The finding was primarily caused by an unforeseen staff shortage. This led to one person being the preparer and reviewer with no segregation of duties. Although the differences were identified, they were not documented on the reconciliation form. To resolve this finding, the Office of Financial Aid (OFA) has hired new employees and implemented a new process. The Financial Operations Team is now fully staffed with two senior accountants and one senior director. As part of our ongoing efforts to strengthen internal controls and ensure the integrity of our processes, we have implemented a segregation of duties framework. This approach will help us clearly define roles and responsibilities, ensuring that critical tasks are divided among different individuals. By doing so, we will meet compliance requirements, reduce errors, and promote accountability within our office. One senior accountant will prepare the monthly reconciliation by the 10th of the following month. The senior director will review the monthly reconciliation by the 15th of the following month. In the absence of the initial preparer/reviewer, the executive director of OFA will take on the reviewer role. We understand that proper documentation is crucial for clarity, tracking, and future troubleshooting. The differences/discrepancies that are identified in the reconciliation process will be accounted for through proper documentation on the reconciliation form, which will be reviewed/investigated by a second reviewer. The Financial Operations Team within the OFA will continue to create timely and accurate monthly Federal Direct Student Loan reconciliations that compare OPUS (Emory), General Ledger (Emory), Student Account Statement-SAS (U.S. Department of Education), and GS (U.S. Department of Education).
Finding 2024-001: Cash Management Federal Agency: U.S. Department of Education Federal Program: Federal Direct Student Loans (ALN 84.268) Award Year: September 1, 2023 to August 31, 2024Criteria or Specific Requirement 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 Federal statutes, regulations, and the terms and conditions of the Federal award. Per 34 CFR 685.300(b)(50), schools participating in the Direct Loan program are required to perform monthly Direct Loan reconciliations. Electronic Announcements DL-22-07 and GENERAL-22-86 explain that a school must reconcile the funds it received from G5 with actual disbursement records the school submitted to Common Origination and Disbursement (COD). Each month, COD sends the school a School Account Statement, which is the Department of Education’s (ED’s) official record of the school’s cash and disbursement records and identifies the difference between the net draws from G5 and the actual disbursement information reported to COD by the school. The school is required to account for any differences by reconciling ED’s records (School Account Statements) with the school’s financial and business records. Condition Found The reconciliation between ED’s records (School Account Statements) and the school’s financial and business records were prepared timely throughout the year; however, the differences identified in the reconciliation were not accounted for and no review or segregation of duties was documented as part of that process. Cause and Possible Asserted Effect The control to ensure that the reconciliation between the ED’s records and the school’s financial and business records was performed and reviewed by an individual separate than that who prepared it and that any differences identified were investigated was not operating effectively. As a result and based on the documentation provided, the monthly reconciliations were not reviewed by an individual separate than that who prepared them and any differences identified during the reconciliation process were not investigated. Questioned Costs None. Whether the Sample Was a Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding Was a Repeat Finding in the Immediately Prior Audit Not at repeat finding. Recommendation We recommend that the University strengthen controls over the management review process over the monthly reconciliations between the ED’s records and the school’s financial and business records to ensure there is a segregation of duties in the review and approval process, and any differences within management’s prescribed level of precision are investigated and documented.View of Responsible Officials The finding was primarily caused by an unforeseen staff shortage. This led to one person being the preparer and reviewer with no segregation of duties. Although the differences were identified, they were not documented on the reconciliation form. To resolve this finding, the Office of Financial Aid (OFA) has hired new employees and implemented a new process. The Financial Operations Team is now fully staffed with two senior accountants and one senior director. As part of our ongoing efforts to strengthen internal controls and ensure the integrity of our processes, we have implemented a segregation of duties framework. This approach will help us clearly define roles and responsibilities, ensuring that critical tasks are divided among different individuals. By doing so, we will meet compliance requirements, reduce errors, and promote accountability within our office. One senior accountant will prepare the monthly reconciliation by the 10th of the following month. The senior director will review the monthly reconciliation by the 15th of the following month. In the absence of the initial preparer/reviewer, the executive director of OFA will take on the reviewer role. We understand that proper documentation is crucial for clarity, tracking, and future troubleshooting. The differences/discrepancies that are identified in the reconciliation process will be accounted for through proper documentation on the reconciliation form, which will be reviewed/investigated by a second reviewer. The Financial Operations Team within the OFA will continue to create timely and accurate monthly Federal Direct Student Loan reconciliations that compare OPUS (Emory), General Ledger (Emory), Student Account Statement-SAS (U.S. Department of Education), and GS (U.S. Department of Education).
Approval of Allowable Costs (Significant Deficiency) Federal Award #’s: 10.553, 10.555 Child Nutrition Cluster Federal Award Years: Multiple Federal Agencies: US Department of Agriculture Passthrough Agency: Texas State Department of Agriculture Compliance Requirement: Allowable Costs Criteria: According to 2 CFR 200.303 (a) the recipient of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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). Review and approval controls designed to ensure accuracy and adequate segregation of duties are an essential component of effective internal controls over costs. Condition/Context: During our testing we noted 2 out of 9 nonpayroll costs tested, totaling $79,106, were not separately reviewed and approved by the Department Chair and/or Superintendent. The costs were accurate and supported by invoices. However, the review and approval of the costs by someone other than the person entering the payment was not supported. Cause: The Academy did not effectively implement existing procedures for the separate review and approval of costs. Effect: The absence of proper approval increases the risk of unauthorized or inappropriate expenses being paid, which could result in loss of federal grant funding. Recommendation: The Academy implements procedures to ensure the effective implementation of established controls. We recommend that the Academy reinforce the importance of the expense approval process through additional training for relevant staff and reiterate the importance of segregation of duties in this process.
Federal Agency: U.S. Department of Education Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Recurring: No Compliance Requirement: Special tests and Provisions - Enrollment Program Information: Student Financial Aid Cluster (ALN 84.007, 84.003, 84.063, 84.268) Criteria: CFR section 685.309 and 690.83(b)(2) requires Colleges to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. 2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure accurate reporting of enrollment status changes. Condition: Out of 40 students sampled from the College’s roster files, 3 out of 40 did not have updated enrollment statuses reported to NSLDS. Cause: The financial aid office does not have an effective system in place to ensure all official student status changes are reported accurately. Effect: Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Questioned Cost: None Recommendations: The College should implement monitoring procedures which will promptly notify the financial aid office of any student status changes. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes accurately. The College should implement a review process to ensure all status changes are addressed by the financial aid office. View of Responsible Officials: The College’s management will address the matter identified as described in the corrective action plan.
Federal Agency: U.S. Department of Education Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Recurring: No Compliance Requirement: Special tests and Provisions - Enrollment Program Information: Student Financial Aid Cluster (ALN 84.007, 84.003, 84.063, 84.268) Criteria: CFR section 685.309 and 690.83(b)(2) requires Colleges to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. 2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure accurate reporting of enrollment status changes. Condition: Out of 40 students sampled from the College’s roster files, 3 out of 40 did not have updated enrollment statuses reported to NSLDS. Cause: The financial aid office does not have an effective system in place to ensure all official student status changes are reported accurately. Effect: Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Questioned Cost: None Recommendations: The College should implement monitoring procedures which will promptly notify the financial aid office of any student status changes. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes accurately. The College should implement a review process to ensure all status changes are addressed by the financial aid office. View of Responsible Officials: The College’s management will address the matter identified as described in the corrective action plan.
Federal Agency: U.S. Department of Education Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Recurring: No Compliance Requirement: Special tests and Provisions - Enrollment Program Information: Student Financial Aid Cluster (ALN 84.007, 84.003, 84.063, 84.268) Criteria: CFR section 685.309 and 690.83(b)(2) requires Colleges to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. 2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure accurate reporting of enrollment status changes. Condition: Out of 40 students sampled from the College’s roster files, 3 out of 40 did not have updated enrollment statuses reported to NSLDS. Cause: The financial aid office does not have an effective system in place to ensure all official student status changes are reported accurately. Effect: Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Questioned Cost: None Recommendations: The College should implement monitoring procedures which will promptly notify the financial aid office of any student status changes. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes accurately. The College should implement a review process to ensure all status changes are addressed by the financial aid office. View of Responsible Officials: The College’s management will address the matter identified as described in the corrective action plan.
Federal Agency: U.S. Department of Education Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Recurring: No Compliance Requirement: Special tests and Provisions - Enrollment Program Information: Student Financial Aid Cluster (ALN 84.007, 84.003, 84.063, 84.268) Criteria: CFR section 685.309 and 690.83(b)(2) requires Colleges to notify the NSLDS within 30 days of a change in student status or include the change in status in a response to an enrollment reporting roster within 60 days of the student’s date of determination of withdrawal. 2 CFR Section 200.303 requires entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures in place to ensure accurate reporting of enrollment status changes. Condition: Out of 40 students sampled from the College’s roster files, 3 out of 40 did not have updated enrollment statuses reported to NSLDS. Cause: The financial aid office does not have an effective system in place to ensure all official student status changes are reported accurately. Effect: Failure to report status changes timely is noncompliance with Federal regulation and could result in loss of future funding. Questioned Cost: None Recommendations: The College should implement monitoring procedures which will promptly notify the financial aid office of any student status changes. A system of monitoring procedures and/or controls will ensure the College is reporting any status changes accurately. The College should implement a review process to ensure all status changes are addressed by the financial aid office. View of Responsible Officials: The College’s management will address the matter identified as described in the corrective action plan.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
PROGRAM DESCRIPTION Reference Number: 2024-004 Proper review of payroll charges to grant funds ALN 84.425U & 84.425W COVID-19 Education Stabilization Fund Pass through identifying number: 21528001245902 Award Year: 2023-2024 Federal Agency: U.S. Department of Education Passed through State Department of Education Criteria: Non-federal entities are required to establish and maintain effective internal controls over compliance in accordance with 2 CFR 200.303(a) and 2 CFR 200.430(g) which requires that compensation charged to federal awards must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, of which documentation must be incorporated into the official records of the entity. Condition Found: During our review of payroll charges that were funded through ESSER funds, it was noted that the District did not have adequate controls in place to monitor the payroll transactions charged to the program. Cause: Although the District implemented Skyward in the prior year, the District did not integrate the appropriate approvals into the system in a timely manner. In addition, turnover in the District Chief Financial Officer position caused difficulties in the District obtaining the proper approvals for journal entries. Effect: The District could fail to appropriately support expenditures charged to the program. Questioned Cost: $0 Recommendation: We recommend the District to implement appropriate approvals in the Skyward accounting system to provide for better oversight of transactions. Views of Responsible Officials: Management agrees with the findings. See corrective action plan beginning on page 114.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster ALN Numbers: Multiple Award Period: September 1, 2023 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal Statues, regulations, and the term and conditions of the federal awards. Condition: During our testing of Common Origination and Disbursement (COD), Return of Title IV Funds (R2T4) and National Student Loan Data System (NSLDS), we noted there was a review process implemented; however, there was no process in place to retain the review being performed as to provide evidence to ensure the controls are being performed effectively. Questioned Costs: None. Context: During our testing, it was noted the University does not have a process in place to ensure controls are being performed effectively. Cause: The University did not have a process in place to ensure controls implemented are being performed effectively Effect: There is no way to determine who was involved in the process should an error be present. Repeat Finding: No Recommendation: We recommend the University reevaluate its procedures and review policies surrounding controls implemented for Title IV Aid. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster ALN Numbers: Multiple Award Period: September 1, 2023 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal Statues, regulations, and the term and conditions of the federal awards. Condition: During our testing of Common Origination and Disbursement (COD), Return of Title IV Funds (R2T4) and National Student Loan Data System (NSLDS), we noted there was a review process implemented; however, there was no process in place to retain the review being performed as to provide evidence to ensure the controls are being performed effectively. Questioned Costs: None. Context: During our testing, it was noted the University does not have a process in place to ensure controls are being performed effectively. Cause: The University did not have a process in place to ensure controls implemented are being performed effectively Effect: There is no way to determine who was involved in the process should an error be present. Repeat Finding: No Recommendation: We recommend the University reevaluate its procedures and review policies surrounding controls implemented for Title IV Aid. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster ALN Numbers: Multiple Award Period: September 1, 2023 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal Statues, regulations, and the term and conditions of the federal awards. Condition: During our testing of Common Origination and Disbursement (COD), Return of Title IV Funds (R2T4) and National Student Loan Data System (NSLDS), we noted there was a review process implemented; however, there was no process in place to retain the review being performed as to provide evidence to ensure the controls are being performed effectively. Questioned Costs: None. Context: During our testing, it was noted the University does not have a process in place to ensure controls are being performed effectively. Cause: The University did not have a process in place to ensure controls implemented are being performed effectively Effect: There is no way to determine who was involved in the process should an error be present. Repeat Finding: No Recommendation: We recommend the University reevaluate its procedures and review policies surrounding controls implemented for Title IV Aid. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster ALN Numbers: Multiple Award Period: September 1, 2023 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal Statues, regulations, and the term and conditions of the federal awards. Condition: During our testing of Common Origination and Disbursement (COD), Return of Title IV Funds (R2T4) and National Student Loan Data System (NSLDS), we noted there was a review process implemented; however, there was no process in place to retain the review being performed as to provide evidence to ensure the controls are being performed effectively. Questioned Costs: None. Context: During our testing, it was noted the University does not have a process in place to ensure controls are being performed effectively. Cause: The University did not have a process in place to ensure controls implemented are being performed effectively Effect: There is no way to determine who was involved in the process should an error be present. Repeat Finding: No Recommendation: We recommend the University reevaluate its procedures and review policies surrounding controls implemented for Title IV Aid. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Cluster ALN Numbers: Multiple Award Period: September 1, 2023 through August 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal Statues, regulations, and the term and conditions of the federal awards. Condition: During our testing of Common Origination and Disbursement (COD), Return of Title IV Funds (R2T4) and National Student Loan Data System (NSLDS), we noted there was a review process implemented; however, there was no process in place to retain the review being performed as to provide evidence to ensure the controls are being performed effectively. Questioned Costs: None. Context: During our testing, it was noted the University does not have a process in place to ensure controls are being performed effectively. Cause: The University did not have a process in place to ensure controls implemented are being performed effectively Effect: There is no way to determine who was involved in the process should an error be present. Repeat Finding: No Recommendation: We recommend the University reevaluate its procedures and review policies surrounding controls implemented for Title IV Aid. Views of Responsible Officials: There is no disagreement with the audit finding.
Compliance Requirement: 2 CFR 200.303 Internal Controls Name of Federal Agency: Corporation for National and Community Service Pass-through Agency: State of Louisiana/Volunteer Louisiana Questioned Costs: None. Condition: During our audit, we obtained an understanding and tested LDSC’s internal control for purposes of planning and performing our audit procedures. In obtaining our understanding and testing LDSC’s internal controls, we determined there were inadequate segregation of duties involving certain aspects of the financial reporting cycle. Criteria: As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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).” Cause: Due to the size of LDSC’s administrative staff, certain duties are performed by the same individual, as follows: • Initiate and approve vendor invoices for payment, • Write checks or initiating electronic disbursements, • Review and approve payroll, including the approver’s payroll • Initiate and approve reimbursements to themselves as the agency head, • Access to check stock, check signing authority, and approval authorization. The following responsibilities over cash receipts are performed by the same individual: • Receive and open mail, • Prepare bank deposits and deposit monies received, • Invoices customers for services provided (host sites). Effect: There is not adequate segregation of duties. Recommendation: We recommend LDSC to continue its practice of involving members of the board and its contract accountant to be involved in the financial reporting process to the extent practical to mitigate the risks related to limited segregation of duties. Views of Responsible Officials: See views of responsible officials on page 27.
Compliance Requirement: 2 CFR 200.303 Internal Controls Name of Federal Agency: Corporation for National and Community Service Pass-through Agency: State of Louisiana/Volunteer Louisiana Questioned Costs: None. Condition: During our audit, we obtained an understanding and tested LDSC’s internal control for purposes of planning and performing our audit procedures. In obtaining our understanding and testing LDSC’s internal controls, we determined there were inadequate segregation of duties involving certain aspects of the financial reporting cycle. Criteria: As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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).” Cause: Due to the size of LDSC’s administrative staff, certain duties are performed by the same individual, as follows: • Initiate and approve vendor invoices for payment, • Write checks or initiating electronic disbursements, • Review and approve payroll, including the approver’s payroll • Initiate and approve reimbursements to themselves as the agency head, • Access to check stock, check signing authority, and approval authorization. The following responsibilities over cash receipts are performed by the same individual: • Receive and open mail, • Prepare bank deposits and deposit monies received, • Invoices customers for services provided (host sites). Effect: There is not adequate segregation of duties. Recommendation: We recommend LDSC to continue its practice of involving members of the board and its contract accountant to be involved in the financial reporting process to the extent practical to mitigate the risks related to limited segregation of duties. Views of Responsible Officials: See views of responsible officials on page 27.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name -93.233/93.837, U.S. Department of Health and Human Services, Research and Development Cluster 93.323, U.S. Department of Health and Human Services, Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - 93.233 - R01HL142116; 93.837 - U01HL146245 93.323 - 22680258J; 32680012K Pass-through Entity - 93.233 N/A (direct); 93.837 N/A (direct) 93.323 Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(a), the nonfederal entity must have and use documented procedures, consistent with state, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a federal award or subaward. The nonfederal entity's documented procurement procedures must conform to the procurement standards identified in §§200.317 through 200.327. Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the SAT, including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Condition - Controls were not sufficient to establish written policies and procedures surrounding procured contracts and to ensure that the history of procurement decisions was documented, as required by 2 CFR 200. Questioned Costs - Research and Development Cluster - unknown ELC - unknown Identification of How Questioned Costs Were Computed - N/A Context - Research and Development Cluster - For the four contracts tested, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Additionally, for the largest of the four contracts with activity of approximately $375,000, which is above the SAT established by FAR, management did not document its rationale for limiting competition, nor was management able to provide evidence that a cost-price analysis was performed. Finally, management has not formally documented an appropriate micropurchase or SAT threshold. ELC - For the three of the four contracts tested that were procured under noncompetitive means, management did not maintain records sufficient to detail the history of procurement, rationale for the method of procurement, selection of the contract type, or basis of the contract price. Further, for three out of four contracts tested under the Research and Development Cluster and all four contracts tested under ELC, management was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Because there was evidence that these contractors were not suspended or debarred, no questioned costs related to this noncompliance were identified. Cause and Effect - A lack of formal procurement policies and procedures, internally established procurement thresholds, or records in support of procurement decisions could result in material noncompliance with federal procurement standards. Recommendation - We recommend that management formalize procurement policies and procedures to demonstrate how the Institute will achieve compliance with standards identified in §§200.317 through 200.327. Additionally, we recommend management retain documented evidence that its policies and procedures were followed to ensure compliance with procurement standards. Views of Responsible Officials and Corrective Action Plan – Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Necessary revisions will be made to the existing procurement policies and procedures in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Allowable Costs/Activities Allowed – Personal Services Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501-01-08, 6 NU50CK000501-02-17 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by an internal control system that ensures the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; (vi) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: DSHS requires its employees to complete monthly time and leave reporting, regardless of whether the employee works solely on a single federal award or cost objective, or on multiple activities or cost objectives. Each employee has a default task profile based on their position in the agency that determines how their payroll and payroll-related dollars are allocated. Employees are instructed and given training on how to report any deviations from their profile as well as report any vacation time, sick time, leave of absence, etc. Employees are required to certify their time by the 10th of the month for the previous months’ time. Like all DSHS employees, supervisors are required to certify their time monthly. However, their time certification includes an additional affirmation which states the supervisor has performed the following: Reviewed the default task profile/labor account code for each of their direct reports. Reviewed the timesheets for all direct reports as compared to the default task profiles/labor account codes for accuracy of time worked and adjusted if necessary. For direct reports who have reported deviations, reviewed and verified the deviations reported and approved the respective timesheet. This documented affirmation provides sufficient documentation to indicate that the supervisors have reviewed after the fact interim payroll and payroll-related charges made to federal awards based on budget estimates. Audit procedures included a selection of 40 payroll-related expenditures incurred during the fiscal year totaling $191,809. For five of the 40 samples selected, the employee supervisor did not certify their monthly timesheet, and thus did not acknowledge neither the review of the employees’ default task profile/account labor code or their timesheets. Questioned costs: None. Context: See “Condition.” Cause: All five of the exceptions noted were directly reporting to the same supervisor. The monthly timesheets selected were during the months of July and August 2024. The supervisor was recently hired in April 2024 and was unaware of the requirement to certify monthly. Effect: Without the supervisor timesheet certification, there is a lack of sufficient documentation to indicate that they have reviewed after-the-fact interim payroll and payroll-related charges made to the federal awards based on budget estimates. Repeat Finding: No Recommendation: DSHS should enhance new hire training policies and procedures to ensure all new hire trainings clearly address labor account codes, monthly time reporting, and task profiles. Views of responsible officials: DSHS has robust timekeeping controls but recognizes this opportunity to enhance training with reinforcement for new supervisors.
Allowable Costs/Activities Allowed – Personal Services Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501-01-08, 6 NU50CK000501-02-17 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.430 Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by an internal control system that ensures the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; (vi) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: DSHS requires its employees to complete monthly time and leave reporting, regardless of whether the employee works solely on a single federal award or cost objective, or on multiple activities or cost objectives. Each employee has a default task profile based on their position in the agency that determines how their payroll and payroll-related dollars are allocated. Employees are instructed and given training on how to report any deviations from their profile as well as report any vacation time, sick time, leave of absence, etc. Employees are required to certify their time by the 10th of the month for the previous months’ time. Like all DSHS employees, supervisors are required to certify their time monthly. However, their time certification includes an additional affirmation which states the supervisor has performed the following: Reviewed the default task profile/labor account code for each of their direct reports. Reviewed the timesheets for all direct reports as compared to the default task profiles/labor account codes for accuracy of time worked and adjusted if necessary. For direct reports who have reported deviations, reviewed and verified the deviations reported and approved the respective timesheet. This documented affirmation provides sufficient documentation to indicate that the supervisors have reviewed after the fact interim payroll and payroll-related charges made to federal awards based on budget estimates. Audit procedures included a selection of 40 payroll-related expenditures incurred during the fiscal year totaling $191,809. For five of the 40 samples selected, the employee supervisor did not certify their monthly timesheet, and thus did not acknowledge neither the review of the employees’ default task profile/account labor code or their timesheets. Questioned costs: None. Context: See “Condition.” Cause: All five of the exceptions noted were directly reporting to the same supervisor. The monthly timesheets selected were during the months of July and August 2024. The supervisor was recently hired in April 2024 and was unaware of the requirement to certify monthly. Effect: Without the supervisor timesheet certification, there is a lack of sufficient documentation to indicate that they have reviewed after-the-fact interim payroll and payroll-related charges made to the federal awards based on budget estimates. Repeat Finding: No Recommendation: DSHS should enhance new hire training policies and procedures to ensure all new hire trainings clearly address labor account codes, monthly time reporting, and task profiles. Views of responsible officials: DSHS has robust timekeeping controls but recognizes this opportunity to enhance training with reinforcement for new supervisors.
Cash Management – Cash Management Improvement Act Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501, 6 NU51CK000353 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027, August 1, 2024 – July 31, 2029 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 31 CFR Part 205, a Federal assistance program must abide by the rules in Subpart A, interest calculation procedures, if it falls within the funding threshold set forth by the Federal government. The dollar threshold is calculated using the most recent Single Audit data. Programs not subject to these rules are considered under Subpart B. Rather than incurring an interest liability for programs in Subpart B, the funds transferred to the State will be limited to the immediate cash needs of the agency and should be times so as to minimize the period between drawdown and disbursement. Condition: The State determines each major program subject to interest liability calculations every year and communicates the covered programs to each agency. Funding techniques and clearance patterns are set out in the Treasury-State Agreement. Per the Texas Cash Management Improvement Act (CMIA) Handbook (based on the Treasury-State agreement), each state agency that administers a major program has the following responsibilities including but not limited to the following: Review flow of funds for affected programs and determine appropriate funding technique. Develop sample data and calculate clearance days on federal funds from the time of deposit in the State Treasury until warrants are issued on the funds (Period 1). Comply with the Subpart B requirements for programs not covered by Subpart A. Per the 2024 Texas Treasury-State Agreement, DSHS was required to submit a Period 1 calculation for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program. Audit procedures included selecting a sample of federal cash draws and verifying that the timing of the federal cash draws was in compliance with the applicable funding techniques specified in the Treasury-State Agreement. Cash draws included in the Period 1 calculation submitted to the Texas Comptroller of Public Accounts’ web application totaled $89,236,255; however, the final amount of expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) for the program was $289,534,627. Accordingly, the Period 1 calculation submission was understated by $200,298,372 and the calculation of the interest obligation owed to or by the federal government was incorrect. Questioned costs: None. Context: See “Condition.” Cause: DSHS made significant adjustments to the SEFA subsequent to the submission of the Period 1 calculation in the Texas Comptroller of Public Accounts’ web application. Once submitted, the web application is locked and DSHS must request for it to be unlocked in order to make revisions. Due to the timing of the adjustments to the SEFA and the conclusion of audit work, DSHS did not have sufficient time to request and submit the revisions. Effect: The calculation of the interest obligation owed to or by the federal government may be misstated if the Period 1 calculation is incorrect. Repeat Finding: No Recommendation: DSHS should enhance reviews of its SEFA to avoid significant adjustments subsequent to the submission of its Period 1 calculation. Views of responsible officials: DSHS acknowledges and agrees with the finding as stated.
Cash Management – Cash Management Improvement Act Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Epidemiology and Laboratory Capacity for Infectious Diseases ALN: 93.323 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 6 NU50CK000501, 6 NU51CK000353 August 1, 2019 – July 31, 2024, August 1, 2019 – July 31, 2027, August 1, 2024 – July 31, 2029 Statistically Valid Sample: No, and not intended to be a statistically valid sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR section 200.303(a), the Texas Department of State Health Services (DSHS) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 31 CFR Part 205, a Federal assistance program must abide by the rules in Subpart A, interest calculation procedures, if it falls within the funding threshold set forth by the Federal government. The dollar threshold is calculated using the most recent Single Audit data. Programs not subject to these rules are considered under Subpart B. Rather than incurring an interest liability for programs in Subpart B, the funds transferred to the State will be limited to the immediate cash needs of the agency and should be times so as to minimize the period between drawdown and disbursement. Condition: The State determines each major program subject to interest liability calculations every year and communicates the covered programs to each agency. Funding techniques and clearance patterns are set out in the Treasury-State Agreement. Per the Texas Cash Management Improvement Act (CMIA) Handbook (based on the Treasury-State agreement), each state agency that administers a major program has the following responsibilities including but not limited to the following: Review flow of funds for affected programs and determine appropriate funding technique. Develop sample data and calculate clearance days on federal funds from the time of deposit in the State Treasury until warrants are issued on the funds (Period 1). Comply with the Subpart B requirements for programs not covered by Subpart A. Per the 2024 Texas Treasury-State Agreement, DSHS was required to submit a Period 1 calculation for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program. Audit procedures included selecting a sample of federal cash draws and verifying that the timing of the federal cash draws was in compliance with the applicable funding techniques specified in the Treasury-State Agreement. Cash draws included in the Period 1 calculation submitted to the Texas Comptroller of Public Accounts’ web application totaled $89,236,255; however, the final amount of expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) for the program was $289,534,627. Accordingly, the Period 1 calculation submission was understated by $200,298,372 and the calculation of the interest obligation owed to or by the federal government was incorrect. Questioned costs: None. Context: See “Condition.” Cause: DSHS made significant adjustments to the SEFA subsequent to the submission of the Period 1 calculation in the Texas Comptroller of Public Accounts’ web application. Once submitted, the web application is locked and DSHS must request for it to be unlocked in order to make revisions. Due to the timing of the adjustments to the SEFA and the conclusion of audit work, DSHS did not have sufficient time to request and submit the revisions. Effect: The calculation of the interest obligation owed to or by the federal government may be misstated if the Period 1 calculation is incorrect. Repeat Finding: No Recommendation: DSHS should enhance reviews of its SEFA to avoid significant adjustments subsequent to the submission of its Period 1 calculation. Views of responsible officials: DSHS acknowledges and agrees with the finding as stated.
Matching and Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101TXOACM, 2101TXOAHD, 2101TXOASS 10/1/2020 – 9/30/2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 42 USC 3029(b) Matching funds; percentage limitation (1) For each fiscal year, not less than 25 percent of the non-Federal share of the total expenditures under the State plan which is required by section 3024(d) of this title shall be met from funds from State or local public sources. (2) Funds required to meet the non-Federal share required by section 3024(d)(1)(D) of this title, in amounts exceeding 10 percent of the cost of the services specified in such section 3024(d)(1)(D) of this title, shall be met from State sources. Condition: During our testing of the program’s matching requirements, we noted the following: HHSC’s required match under 42 USC 3029(b)(1) for the fiscal year 2021 grant, which ended on September 30, 2023, was $979,430. State administration expenditures totaled $3,917,721, of which 25%, or 979,430 must be from non-Federal sources. HHSC provided a population of $1,206,534 of administration expenditures paid from non-Federal sources used to meet the matching requirement. Of this amount, audit procedures included testing 159 expenditures, totaling $771,585 that were paid from non-Federal sources used to meet the 25% matching requirement. We noted that 134 of the expenditures, totaling $744,159 were not administrative costs incurred by the State. Rather these were amounts paid to subrecipients. Accordingly, allowable non-federal expenditures were $462,376, which is less than the required match amount of $979,430 or 13.6% of the of the cost of state plan administration. HHSC did not meet the matching requirement per 42 USC 3029(b)(1). Additionally, the recipient share of expenditures (line j) and the remaining recipient share to be provided (line k) on the corresponding SF_x0002_425 report for 2101TXOASS was incorrectly reported. HHSC reported the recipient share of expenditures of $7,452,949; however, allowable non-federal expenditures were only $6,708,790. HHSC calculates its required recipient share of expenditures related to the state and Area Agencies on Aging (AAA’s) costs of administration of area plans and reports it on line i of the SF-425 report. For the fiscal year 2021 grant, we noted that while the match amount was met, the required match as reported on the SF-425 was calculated incorrectly as follows: See chart or table in the Schedule of Findings and Questioned Costs. HHSC’s required match under 42 USC 3029(b)(2) for the fiscal year 2021 grant, which ended on September 30, 2023, was $11,355,969. Of this amount, $3,785,323 was required to be funded from state sources, while the remaining $7,570,646, would be met by amounts paid by the AAA’s. HHSC provided a calculation of $30,107,759 of expenditures incurred to meet the AAA portion of the requirement. However, CLA was unable to substantiate that amount based on supporting documentation as final expenditures submitted by the AAA’s had been revised, however, HHSC did not revise their calculations. Questioned costs: Unknown Context: See “Condition.” Cause: Management calculates matching requirements and identifies actual expenditures to meet these requirements. For the exceptions noted for 42 USC 3029(b)(1), management failed to exclude unallowable expenditures when identifying expenditures incurred to meet the matching requirements. For the exception noted for 42 USC 3029(b)(2), management did not revise the matching calculation based on final amounts received from the AAA’s. Effect: Failure to meet matching requirements may result in a reduction in federal funding. Furthermore, failure to calculate, review, and approve final matching expenditures may lead to noncompliance with the terms of the grant and questioned costs. Repeat Finding: No. Recommendation: We recommend management enhance existing controls around the review of all expenditures that are used to meet the minimum required matching requirements. Views of responsible officials: HHSC concurs with the finding.
Matching and Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101TXOACM, 2101TXOAHD, 2101TXOASS 10/1/2020 – 9/30/2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 42 USC 3029(b) Matching funds; percentage limitation (1) For each fiscal year, not less than 25 percent of the non-Federal share of the total expenditures under the State plan which is required by section 3024(d) of this title shall be met from funds from State or local public sources. (2) Funds required to meet the non-Federal share required by section 3024(d)(1)(D) of this title, in amounts exceeding 10 percent of the cost of the services specified in such section 3024(d)(1)(D) of this title, shall be met from State sources. Condition: During our testing of the program’s matching requirements, we noted the following: HHSC’s required match under 42 USC 3029(b)(1) for the fiscal year 2021 grant, which ended on September 30, 2023, was $979,430. State administration expenditures totaled $3,917,721, of which 25%, or 979,430 must be from non-Federal sources. HHSC provided a population of $1,206,534 of administration expenditures paid from non-Federal sources used to meet the matching requirement. Of this amount, audit procedures included testing 159 expenditures, totaling $771,585 that were paid from non-Federal sources used to meet the 25% matching requirement. We noted that 134 of the expenditures, totaling $744,159 were not administrative costs incurred by the State. Rather these were amounts paid to subrecipients. Accordingly, allowable non-federal expenditures were $462,376, which is less than the required match amount of $979,430 or 13.6% of the of the cost of state plan administration. HHSC did not meet the matching requirement per 42 USC 3029(b)(1). Additionally, the recipient share of expenditures (line j) and the remaining recipient share to be provided (line k) on the corresponding SF_x0002_425 report for 2101TXOASS was incorrectly reported. HHSC reported the recipient share of expenditures of $7,452,949; however, allowable non-federal expenditures were only $6,708,790. HHSC calculates its required recipient share of expenditures related to the state and Area Agencies on Aging (AAA’s) costs of administration of area plans and reports it on line i of the SF-425 report. For the fiscal year 2021 grant, we noted that while the match amount was met, the required match as reported on the SF-425 was calculated incorrectly as follows: See chart or table in the Schedule of Findings and Questioned Costs. HHSC’s required match under 42 USC 3029(b)(2) for the fiscal year 2021 grant, which ended on September 30, 2023, was $11,355,969. Of this amount, $3,785,323 was required to be funded from state sources, while the remaining $7,570,646, would be met by amounts paid by the AAA’s. HHSC provided a calculation of $30,107,759 of expenditures incurred to meet the AAA portion of the requirement. However, CLA was unable to substantiate that amount based on supporting documentation as final expenditures submitted by the AAA’s had been revised, however, HHSC did not revise their calculations. Questioned costs: Unknown Context: See “Condition.” Cause: Management calculates matching requirements and identifies actual expenditures to meet these requirements. For the exceptions noted for 42 USC 3029(b)(1), management failed to exclude unallowable expenditures when identifying expenditures incurred to meet the matching requirements. For the exception noted for 42 USC 3029(b)(2), management did not revise the matching calculation based on final amounts received from the AAA’s. Effect: Failure to meet matching requirements may result in a reduction in federal funding. Furthermore, failure to calculate, review, and approve final matching expenditures may lead to noncompliance with the terms of the grant and questioned costs. Repeat Finding: No. Recommendation: We recommend management enhance existing controls around the review of all expenditures that are used to meet the minimum required matching requirements. Views of responsible officials: HHSC concurs with the finding.
Matching and Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101TXOACM, 2101TXOAHD, 2101TXOASS 10/1/2020 – 9/30/2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 42 USC 3029(b) Matching funds; percentage limitation (1) For each fiscal year, not less than 25 percent of the non-Federal share of the total expenditures under the State plan which is required by section 3024(d) of this title shall be met from funds from State or local public sources. (2) Funds required to meet the non-Federal share required by section 3024(d)(1)(D) of this title, in amounts exceeding 10 percent of the cost of the services specified in such section 3024(d)(1)(D) of this title, shall be met from State sources. Condition: During our testing of the program’s matching requirements, we noted the following: HHSC’s required match under 42 USC 3029(b)(1) for the fiscal year 2021 grant, which ended on September 30, 2023, was $979,430. State administration expenditures totaled $3,917,721, of which 25%, or 979,430 must be from non-Federal sources. HHSC provided a population of $1,206,534 of administration expenditures paid from non-Federal sources used to meet the matching requirement. Of this amount, audit procedures included testing 159 expenditures, totaling $771,585 that were paid from non-Federal sources used to meet the 25% matching requirement. We noted that 134 of the expenditures, totaling $744,159 were not administrative costs incurred by the State. Rather these were amounts paid to subrecipients. Accordingly, allowable non-federal expenditures were $462,376, which is less than the required match amount of $979,430 or 13.6% of the of the cost of state plan administration. HHSC did not meet the matching requirement per 42 USC 3029(b)(1). Additionally, the recipient share of expenditures (line j) and the remaining recipient share to be provided (line k) on the corresponding SF_x0002_425 report for 2101TXOASS was incorrectly reported. HHSC reported the recipient share of expenditures of $7,452,949; however, allowable non-federal expenditures were only $6,708,790. HHSC calculates its required recipient share of expenditures related to the state and Area Agencies on Aging (AAA’s) costs of administration of area plans and reports it on line i of the SF-425 report. For the fiscal year 2021 grant, we noted that while the match amount was met, the required match as reported on the SF-425 was calculated incorrectly as follows: See chart or table in the Schedule of Findings and Questioned Costs. HHSC’s required match under 42 USC 3029(b)(2) for the fiscal year 2021 grant, which ended on September 30, 2023, was $11,355,969. Of this amount, $3,785,323 was required to be funded from state sources, while the remaining $7,570,646, would be met by amounts paid by the AAA’s. HHSC provided a calculation of $30,107,759 of expenditures incurred to meet the AAA portion of the requirement. However, CLA was unable to substantiate that amount based on supporting documentation as final expenditures submitted by the AAA’s had been revised, however, HHSC did not revise their calculations. Questioned costs: Unknown Context: See “Condition.” Cause: Management calculates matching requirements and identifies actual expenditures to meet these requirements. For the exceptions noted for 42 USC 3029(b)(1), management failed to exclude unallowable expenditures when identifying expenditures incurred to meet the matching requirements. For the exception noted for 42 USC 3029(b)(2), management did not revise the matching calculation based on final amounts received from the AAA’s. Effect: Failure to meet matching requirements may result in a reduction in federal funding. Furthermore, failure to calculate, review, and approve final matching expenditures may lead to noncompliance with the terms of the grant and questioned costs. Repeat Finding: No. Recommendation: We recommend management enhance existing controls around the review of all expenditures that are used to meet the minimum required matching requirements. Views of responsible officials: HHSC concurs with the finding.
Matching and Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101TXOACM, 2101TXOAHD, 2101TXOASS 10/1/2020 – 9/30/2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 42 USC 3029(b) Matching funds; percentage limitation (1) For each fiscal year, not less than 25 percent of the non-Federal share of the total expenditures under the State plan which is required by section 3024(d) of this title shall be met from funds from State or local public sources. (2) Funds required to meet the non-Federal share required by section 3024(d)(1)(D) of this title, in amounts exceeding 10 percent of the cost of the services specified in such section 3024(d)(1)(D) of this title, shall be met from State sources. Condition: During our testing of the program’s matching requirements, we noted the following: HHSC’s required match under 42 USC 3029(b)(1) for the fiscal year 2021 grant, which ended on September 30, 2023, was $979,430. State administration expenditures totaled $3,917,721, of which 25%, or 979,430 must be from non-Federal sources. HHSC provided a population of $1,206,534 of administration expenditures paid from non-Federal sources used to meet the matching requirement. Of this amount, audit procedures included testing 159 expenditures, totaling $771,585 that were paid from non-Federal sources used to meet the 25% matching requirement. We noted that 134 of the expenditures, totaling $744,159 were not administrative costs incurred by the State. Rather these were amounts paid to subrecipients. Accordingly, allowable non-federal expenditures were $462,376, which is less than the required match amount of $979,430 or 13.6% of the of the cost of state plan administration. HHSC did not meet the matching requirement per 42 USC 3029(b)(1). Additionally, the recipient share of expenditures (line j) and the remaining recipient share to be provided (line k) on the corresponding SF_x0002_425 report for 2101TXOASS was incorrectly reported. HHSC reported the recipient share of expenditures of $7,452,949; however, allowable non-federal expenditures were only $6,708,790. HHSC calculates its required recipient share of expenditures related to the state and Area Agencies on Aging (AAA’s) costs of administration of area plans and reports it on line i of the SF-425 report. For the fiscal year 2021 grant, we noted that while the match amount was met, the required match as reported on the SF-425 was calculated incorrectly as follows: See chart or table in the Schedule of Findings and Questioned Costs. HHSC’s required match under 42 USC 3029(b)(2) for the fiscal year 2021 grant, which ended on September 30, 2023, was $11,355,969. Of this amount, $3,785,323 was required to be funded from state sources, while the remaining $7,570,646, would be met by amounts paid by the AAA’s. HHSC provided a calculation of $30,107,759 of expenditures incurred to meet the AAA portion of the requirement. However, CLA was unable to substantiate that amount based on supporting documentation as final expenditures submitted by the AAA’s had been revised, however, HHSC did not revise their calculations. Questioned costs: Unknown Context: See “Condition.” Cause: Management calculates matching requirements and identifies actual expenditures to meet these requirements. For the exceptions noted for 42 USC 3029(b)(1), management failed to exclude unallowable expenditures when identifying expenditures incurred to meet the matching requirements. For the exception noted for 42 USC 3029(b)(2), management did not revise the matching calculation based on final amounts received from the AAA’s. Effect: Failure to meet matching requirements may result in a reduction in federal funding. Furthermore, failure to calculate, review, and approve final matching expenditures may lead to noncompliance with the terms of the grant and questioned costs. Repeat Finding: No. Recommendation: We recommend management enhance existing controls around the review of all expenditures that are used to meet the minimum required matching requirements. Views of responsible officials: HHSC concurs with the finding.
Matching and Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101TXOACM, 2101TXOAHD, 2101TXOASS 10/1/2020 – 9/30/2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 42 USC 3029(b) Matching funds; percentage limitation (1) For each fiscal year, not less than 25 percent of the non-Federal share of the total expenditures under the State plan which is required by section 3024(d) of this title shall be met from funds from State or local public sources. (2) Funds required to meet the non-Federal share required by section 3024(d)(1)(D) of this title, in amounts exceeding 10 percent of the cost of the services specified in such section 3024(d)(1)(D) of this title, shall be met from State sources. Condition: During our testing of the program’s matching requirements, we noted the following: HHSC’s required match under 42 USC 3029(b)(1) for the fiscal year 2021 grant, which ended on September 30, 2023, was $979,430. State administration expenditures totaled $3,917,721, of which 25%, or 979,430 must be from non-Federal sources. HHSC provided a population of $1,206,534 of administration expenditures paid from non-Federal sources used to meet the matching requirement. Of this amount, audit procedures included testing 159 expenditures, totaling $771,585 that were paid from non-Federal sources used to meet the 25% matching requirement. We noted that 134 of the expenditures, totaling $744,159 were not administrative costs incurred by the State. Rather these were amounts paid to subrecipients. Accordingly, allowable non-federal expenditures were $462,376, which is less than the required match amount of $979,430 or 13.6% of the of the cost of state plan administration. HHSC did not meet the matching requirement per 42 USC 3029(b)(1). Additionally, the recipient share of expenditures (line j) and the remaining recipient share to be provided (line k) on the corresponding SF_x0002_425 report for 2101TXOASS was incorrectly reported. HHSC reported the recipient share of expenditures of $7,452,949; however, allowable non-federal expenditures were only $6,708,790. HHSC calculates its required recipient share of expenditures related to the state and Area Agencies on Aging (AAA’s) costs of administration of area plans and reports it on line i of the SF-425 report. For the fiscal year 2021 grant, we noted that while the match amount was met, the required match as reported on the SF-425 was calculated incorrectly as follows: See chart or table in the Schedule of Findings and Questioned Costs. HHSC’s required match under 42 USC 3029(b)(2) for the fiscal year 2021 grant, which ended on September 30, 2023, was $11,355,969. Of this amount, $3,785,323 was required to be funded from state sources, while the remaining $7,570,646, would be met by amounts paid by the AAA’s. HHSC provided a calculation of $30,107,759 of expenditures incurred to meet the AAA portion of the requirement. However, CLA was unable to substantiate that amount based on supporting documentation as final expenditures submitted by the AAA’s had been revised, however, HHSC did not revise their calculations. Questioned costs: Unknown Context: See “Condition.” Cause: Management calculates matching requirements and identifies actual expenditures to meet these requirements. For the exceptions noted for 42 USC 3029(b)(1), management failed to exclude unallowable expenditures when identifying expenditures incurred to meet the matching requirements. For the exception noted for 42 USC 3029(b)(2), management did not revise the matching calculation based on final amounts received from the AAA’s. Effect: Failure to meet matching requirements may result in a reduction in federal funding. Furthermore, failure to calculate, review, and approve final matching expenditures may lead to noncompliance with the terms of the grant and questioned costs. Repeat Finding: No. Recommendation: We recommend management enhance existing controls around the review of all expenditures that are used to meet the minimum required matching requirements. Views of responsible officials: HHSC concurs with the finding.
Matching and Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2101TXOACM, 2101TXOAHD, 2101TXOASS 10/1/2020 – 9/30/2023 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 42 USC 3029(b) Matching funds; percentage limitation (1) For each fiscal year, not less than 25 percent of the non-Federal share of the total expenditures under the State plan which is required by section 3024(d) of this title shall be met from funds from State or local public sources. (2) Funds required to meet the non-Federal share required by section 3024(d)(1)(D) of this title, in amounts exceeding 10 percent of the cost of the services specified in such section 3024(d)(1)(D) of this title, shall be met from State sources. Condition: During our testing of the program’s matching requirements, we noted the following: HHSC’s required match under 42 USC 3029(b)(1) for the fiscal year 2021 grant, which ended on September 30, 2023, was $979,430. State administration expenditures totaled $3,917,721, of which 25%, or 979,430 must be from non-Federal sources. HHSC provided a population of $1,206,534 of administration expenditures paid from non-Federal sources used to meet the matching requirement. Of this amount, audit procedures included testing 159 expenditures, totaling $771,585 that were paid from non-Federal sources used to meet the 25% matching requirement. We noted that 134 of the expenditures, totaling $744,159 were not administrative costs incurred by the State. Rather these were amounts paid to subrecipients. Accordingly, allowable non-federal expenditures were $462,376, which is less than the required match amount of $979,430 or 13.6% of the of the cost of state plan administration. HHSC did not meet the matching requirement per 42 USC 3029(b)(1). Additionally, the recipient share of expenditures (line j) and the remaining recipient share to be provided (line k) on the corresponding SF_x0002_425 report for 2101TXOASS was incorrectly reported. HHSC reported the recipient share of expenditures of $7,452,949; however, allowable non-federal expenditures were only $6,708,790. HHSC calculates its required recipient share of expenditures related to the state and Area Agencies on Aging (AAA’s) costs of administration of area plans and reports it on line i of the SF-425 report. For the fiscal year 2021 grant, we noted that while the match amount was met, the required match as reported on the SF-425 was calculated incorrectly as follows: See chart or table in the Schedule of Findings and Questioned Costs. HHSC’s required match under 42 USC 3029(b)(2) for the fiscal year 2021 grant, which ended on September 30, 2023, was $11,355,969. Of this amount, $3,785,323 was required to be funded from state sources, while the remaining $7,570,646, would be met by amounts paid by the AAA’s. HHSC provided a calculation of $30,107,759 of expenditures incurred to meet the AAA portion of the requirement. However, CLA was unable to substantiate that amount based on supporting documentation as final expenditures submitted by the AAA’s had been revised, however, HHSC did not revise their calculations. Questioned costs: Unknown Context: See “Condition.” Cause: Management calculates matching requirements and identifies actual expenditures to meet these requirements. For the exceptions noted for 42 USC 3029(b)(1), management failed to exclude unallowable expenditures when identifying expenditures incurred to meet the matching requirements. For the exception noted for 42 USC 3029(b)(2), management did not revise the matching calculation based on final amounts received from the AAA’s. Effect: Failure to meet matching requirements may result in a reduction in federal funding. Furthermore, failure to calculate, review, and approve final matching expenditures may lead to noncompliance with the terms of the grant and questioned costs. Repeat Finding: No. Recommendation: We recommend management enhance existing controls around the review of all expenditures that are used to meet the minimum required matching requirements. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – Financial Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster ALN: 93.044 93.045 93.053 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 2201TXOACM 10/1/2021 – 9/30/2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.328(c), the recipient or subrecipient must submit financial reports as required by the Federal award. Per 2 CFR 200.302(b)(2), the recipient's and subrecipient's financial management system must provide for the following: accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements in §§ 200.328 and 200.329. Condition: Audit procedures included a sample of six SF-425 reports submitted during the fiscal year. For the March 31, 2024, report for the 2201TXOACM award, audit procedures included comparing the reported amounts to the general ledger. We noted the following variances: See chart or table in the Schedule of Findings and Questioned Costs. Questioned costs: None. Context: See “Condition.” Cause: Amounts in the supporting general ledger documentation were accurate. However, the corresponding line items on the SF-425 report were not reported accurately. Management did not revise the March 31, 2024, report as the report is cumulative and the final report for the 2201TXOACM grant will include the corrected amounts. Effect: Improperly designed internal controls over reporting may result in a misstatement of amounts reported on federal reports. Repeat Finding: No. Recommendation: We recommend management reconcile all amounts reported on the SF-425 reports to the general ledger or other supporting documentation to ensure completeness and accuracy prior to submission. Views of responsible officials: HHSC concurs with the finding.
Reporting – FFATA Subawards Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster Temporary Assistance for Needy Families (TANF) Social Services Block Grant Opioid STR Block Grants for Community Mental Health Services Block Grants for Substance Abuse, Prevention, Treatment and Recovery Services ALN: 93.044, 93.045, 93.053 93.558 93.667 93.788 93.958 93.959 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: Aging Cluster 2101TXOACM, 2101TXOAHD, 2101TXOANS, 2101TXOASS 2201TXOACM, 2201TXOAHD, 2201TXOANS, 2201TXOASS, 2301TXOACM, 2301TXOAHD, 2301TXOANS, 2301TXOASS, 2401TXOACM, 2401TXOAHD, 2401TXOANS, 2401TXOASS October 1, 2020 – September 30, 2023, October 1, 2021 – September 30, 2024, October 1, 2022 – September 30, 2024, October 1, 2022 – September 30, 2025 and October 1, 2023 – September 30, 2025 TANF 2301TXTANF, 2301TXTAN3, 2401TXTANF, 2401TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2023 – September 30, 2024 Social Services Block Grant 2201TXSOSR, 2301TXSOSR and 2401TXSOSR October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 and October 1, 2023 – September 30, 2025 Opioid STR 6H79TI083288 and 5H79TI085747 September 30, 2020 – September 29, 2023, September 30, 2022 – September 29, 2024 Block Grants for Community Mental Health Services 6B09SM083999, 1B09SM085994, 6B09SM085994, 1B09SM087322, 1B09SM087345, 6B09SM087345, 1B09SM09610, 1B09SM085385, 6B09SM089380, 1B09SM085913, 1B09SM089984 March 15, 2021 – March 14, 2024, October 1, 2021 – September 30, 2023, October 17, 2022 – October 16, 2024, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, September 1, 2021 – September 30, 2025, September 30, 2023 – September 29, 2025, September 30, 2024 – September 29, 2026 Block Grants for Substance Use Prevention, Treatment and Recovery Services 6B08TI084673, 1B08TI085835, 6B08TI085835, 1B08TI083969, 1B08TI084609, 6B08TI085835, 1B08TI087067, 6B08TI083545 October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024, September 1, 2021 – September 30, 2025, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, March 15, 2021 – March 15, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109- 282), as amended by Section 6202 of Public Law 110-252, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: The HHSC Federal Funds Office (FFO) is responsible for submitting all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). A standard FFATA Reporting template has been created by the FFO that includes all required elements to be submitted. Program departments must complete and submit the template to the FFO for all federal subawards with amounts over $30,000 by the 15th of every month to be included in that month’s submission. Currently, it is the responsibility of the individual program departments to ensure that each obligating action at or over $30,000 is reported in the FFATA Reporting Template no later than the end of the next month in which the obligation was made. Due to system limitations, there is no central tracking of award obligations. Thus, HHSC was unable to provide a population of first-tier subawards of $30,000 or more that were obligated during the fiscal year and required to be submitted in FSRS. Accordingly, we were unable to select a sample and test for internal controls over compliance or compliance. Questioned costs: None. Context: See “Condition.” Cause: CAPPS-FIN, HHSC’s system of record, does not have the capability to track the date of obligation of federal awards. Effect: Failure to report all subawards $30,000 or greater in FSRS will result in noncompliance with terms of the federal grant guidelines. Repeat Finding: 2023-010, 2022-013, 2021-007 Recommendation: HHSC should implement functionality into CAPPS-FIN to track when obligations of federal awards are made so that the agency is able to retrieve a list of all subawards by obligation date in order to monitor compliance with the Federal Funding Accountability and Transparency Act. Views of responsible officials: HHSC concurs with the finding.
Reporting – FFATA Subawards Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster Temporary Assistance for Needy Families (TANF) Social Services Block Grant Opioid STR Block Grants for Community Mental Health Services Block Grants for Substance Abuse, Prevention, Treatment and Recovery Services ALN: 93.044, 93.045, 93.053 93.558 93.667 93.788 93.958 93.959 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: Aging Cluster 2101TXOACM, 2101TXOAHD, 2101TXOANS, 2101TXOASS 2201TXOACM, 2201TXOAHD, 2201TXOANS, 2201TXOASS, 2301TXOACM, 2301TXOAHD, 2301TXOANS, 2301TXOASS, 2401TXOACM, 2401TXOAHD, 2401TXOANS, 2401TXOASS October 1, 2020 – September 30, 2023, October 1, 2021 – September 30, 2024, October 1, 2022 – September 30, 2024, October 1, 2022 – September 30, 2025 and October 1, 2023 – September 30, 2025 TANF 2301TXTANF, 2301TXTAN3, 2401TXTANF, 2401TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2023 – September 30, 2024 Social Services Block Grant 2201TXSOSR, 2301TXSOSR and 2401TXSOSR October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 and October 1, 2023 – September 30, 2025 Opioid STR 6H79TI083288 and 5H79TI085747 September 30, 2020 – September 29, 2023, September 30, 2022 – September 29, 2024 Block Grants for Community Mental Health Services 6B09SM083999, 1B09SM085994, 6B09SM085994, 1B09SM087322, 1B09SM087345, 6B09SM087345, 1B09SM09610, 1B09SM085385, 6B09SM089380, 1B09SM085913, 1B09SM089984 March 15, 2021 – March 14, 2024, October 1, 2021 – September 30, 2023, October 17, 2022 – October 16, 2024, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, September 1, 2021 – September 30, 2025, September 30, 2023 – September 29, 2025, September 30, 2024 – September 29, 2026 Block Grants for Substance Use Prevention, Treatment and Recovery Services 6B08TI084673, 1B08TI085835, 6B08TI085835, 1B08TI083969, 1B08TI084609, 6B08TI085835, 1B08TI087067, 6B08TI083545 October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024, September 1, 2021 – September 30, 2025, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, March 15, 2021 – March 15, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109- 282), as amended by Section 6202 of Public Law 110-252, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: The HHSC Federal Funds Office (FFO) is responsible for submitting all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). A standard FFATA Reporting template has been created by the FFO that includes all required elements to be submitted. Program departments must complete and submit the template to the FFO for all federal subawards with amounts over $30,000 by the 15th of every month to be included in that month’s submission. Currently, it is the responsibility of the individual program departments to ensure that each obligating action at or over $30,000 is reported in the FFATA Reporting Template no later than the end of the next month in which the obligation was made. Due to system limitations, there is no central tracking of award obligations. Thus, HHSC was unable to provide a population of first-tier subawards of $30,000 or more that were obligated during the fiscal year and required to be submitted in FSRS. Accordingly, we were unable to select a sample and test for internal controls over compliance or compliance. Questioned costs: None. Context: See “Condition.” Cause: CAPPS-FIN, HHSC’s system of record, does not have the capability to track the date of obligation of federal awards. Effect: Failure to report all subawards $30,000 or greater in FSRS will result in noncompliance with terms of the federal grant guidelines. Repeat Finding: 2023-010, 2022-013, 2021-007 Recommendation: HHSC should implement functionality into CAPPS-FIN to track when obligations of federal awards are made so that the agency is able to retrieve a list of all subawards by obligation date in order to monitor compliance with the Federal Funding Accountability and Transparency Act. Views of responsible officials: HHSC concurs with the finding.
Reporting – FFATA Subawards Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster Temporary Assistance for Needy Families (TANF) Social Services Block Grant Opioid STR Block Grants for Community Mental Health Services Block Grants for Substance Abuse, Prevention, Treatment and Recovery Services ALN: 93.044, 93.045, 93.053 93.558 93.667 93.788 93.958 93.959 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: Aging Cluster 2101TXOACM, 2101TXOAHD, 2101TXOANS, 2101TXOASS 2201TXOACM, 2201TXOAHD, 2201TXOANS, 2201TXOASS, 2301TXOACM, 2301TXOAHD, 2301TXOANS, 2301TXOASS, 2401TXOACM, 2401TXOAHD, 2401TXOANS, 2401TXOASS October 1, 2020 – September 30, 2023, October 1, 2021 – September 30, 2024, October 1, 2022 – September 30, 2024, October 1, 2022 – September 30, 2025 and October 1, 2023 – September 30, 2025 TANF 2301TXTANF, 2301TXTAN3, 2401TXTANF, 2401TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2023 – September 30, 2024 Social Services Block Grant 2201TXSOSR, 2301TXSOSR and 2401TXSOSR October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 and October 1, 2023 – September 30, 2025 Opioid STR 6H79TI083288 and 5H79TI085747 September 30, 2020 – September 29, 2023, September 30, 2022 – September 29, 2024 Block Grants for Community Mental Health Services 6B09SM083999, 1B09SM085994, 6B09SM085994, 1B09SM087322, 1B09SM087345, 6B09SM087345, 1B09SM09610, 1B09SM085385, 6B09SM089380, 1B09SM085913, 1B09SM089984 March 15, 2021 – March 14, 2024, October 1, 2021 – September 30, 2023, October 17, 2022 – October 16, 2024, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, September 1, 2021 – September 30, 2025, September 30, 2023 – September 29, 2025, September 30, 2024 – September 29, 2026 Block Grants for Substance Use Prevention, Treatment and Recovery Services 6B08TI084673, 1B08TI085835, 6B08TI085835, 1B08TI083969, 1B08TI084609, 6B08TI085835, 1B08TI087067, 6B08TI083545 October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024, September 1, 2021 – September 30, 2025, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, March 15, 2021 – March 15, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109- 282), as amended by Section 6202 of Public Law 110-252, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: The HHSC Federal Funds Office (FFO) is responsible for submitting all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). A standard FFATA Reporting template has been created by the FFO that includes all required elements to be submitted. Program departments must complete and submit the template to the FFO for all federal subawards with amounts over $30,000 by the 15th of every month to be included in that month’s submission. Currently, it is the responsibility of the individual program departments to ensure that each obligating action at or over $30,000 is reported in the FFATA Reporting Template no later than the end of the next month in which the obligation was made. Due to system limitations, there is no central tracking of award obligations. Thus, HHSC was unable to provide a population of first-tier subawards of $30,000 or more that were obligated during the fiscal year and required to be submitted in FSRS. Accordingly, we were unable to select a sample and test for internal controls over compliance or compliance. Questioned costs: None. Context: See “Condition.” Cause: CAPPS-FIN, HHSC’s system of record, does not have the capability to track the date of obligation of federal awards. Effect: Failure to report all subawards $30,000 or greater in FSRS will result in noncompliance with terms of the federal grant guidelines. Repeat Finding: 2023-010, 2022-013, 2021-007 Recommendation: HHSC should implement functionality into CAPPS-FIN to track when obligations of federal awards are made so that the agency is able to retrieve a list of all subawards by obligation date in order to monitor compliance with the Federal Funding Accountability and Transparency Act. Views of responsible officials: HHSC concurs with the finding.
Reporting – FFATA Subawards Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Aging Cluster Temporary Assistance for Needy Families (TANF) Social Services Block Grant Opioid STR Block Grants for Community Mental Health Services Block Grants for Substance Abuse, Prevention, Treatment and Recovery Services ALN: 93.044, 93.045, 93.053 93.558 93.667 93.788 93.958 93.959 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: Aging Cluster 2101TXOACM, 2101TXOAHD, 2101TXOANS, 2101TXOASS 2201TXOACM, 2201TXOAHD, 2201TXOANS, 2201TXOASS, 2301TXOACM, 2301TXOAHD, 2301TXOANS, 2301TXOASS, 2401TXOACM, 2401TXOAHD, 2401TXOANS, 2401TXOASS October 1, 2020 – September 30, 2023, October 1, 2021 – September 30, 2024, October 1, 2022 – September 30, 2024, October 1, 2022 – September 30, 2025 and October 1, 2023 – September 30, 2025 TANF 2301TXTANF, 2301TXTAN3, 2401TXTANF, 2401TXTAN3 October 1, 2022 – September 30, 2023 and October 1, 2023 – September 30, 2024 Social Services Block Grant 2201TXSOSR, 2301TXSOSR and 2401TXSOSR October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024 and October 1, 2023 – September 30, 2025 Opioid STR 6H79TI083288 and 5H79TI085747 September 30, 2020 – September 29, 2023, September 30, 2022 – September 29, 2024 Block Grants for Community Mental Health Services 6B09SM083999, 1B09SM085994, 6B09SM085994, 1B09SM087322, 1B09SM087345, 6B09SM087345, 1B09SM09610, 1B09SM085385, 6B09SM089380, 1B09SM085913, 1B09SM089984 March 15, 2021 – March 14, 2024, October 1, 2021 – September 30, 2023, October 17, 2022 – October 16, 2024, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, September 1, 2021 – September 30, 2025, September 30, 2023 – September 29, 2025, September 30, 2024 – September 29, 2026 Block Grants for Substance Use Prevention, Treatment and Recovery Services 6B08TI084673, 1B08TI085835, 6B08TI085835, 1B08TI083969, 1B08TI084609, 6B08TI085835, 1B08TI087067, 6B08TI083545 October 1, 2021 – September 30, 2023, October 1, 2022 – September 30, 2024, September 1, 2021 – September 30, 2025, October 1, 2022 – September 30, 2024, October 1, 2023 – September 30, 2025, March 15, 2021 – March 15, 2024 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Per 2 CFR 200.303(a), Health and Human Services Commission (HHSC) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109- 282), as amended by Section 6202 of Public Law 110-252, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition: The HHSC Federal Funds Office (FFO) is responsible for submitting all required subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). A standard FFATA Reporting template has been created by the FFO that includes all required elements to be submitted. Program departments must complete and submit the template to the FFO for all federal subawards with amounts over $30,000 by the 15th of every month to be included in that month’s submission. Currently, it is the responsibility of the individual program departments to ensure that each obligating action at or over $30,000 is reported in the FFATA Reporting Template no later than the end of the next month in which the obligation was made. Due to system limitations, there is no central tracking of award obligations. Thus, HHSC was unable to provide a population of first-tier subawards of $30,000 or more that were obligated during the fiscal year and required to be submitted in FSRS. Accordingly, we were unable to select a sample and test for internal controls over compliance or compliance. Questioned costs: None. Context: See “Condition.” Cause: CAPPS-FIN, HHSC’s system of record, does not have the capability to track the date of obligation of federal awards. Effect: Failure to report all subawards $30,000 or greater in FSRS will result in noncompliance with terms of the federal grant guidelines. Repeat Finding: 2023-010, 2022-013, 2021-007 Recommendation: HHSC should implement functionality into CAPPS-FIN to track when obligations of federal awards are made so that the agency is able to retrieve a list of all subawards by obligation date in order to monitor compliance with the Federal Funding Accountability and Transparency Act. Views of responsible officials: HHSC concurs with the finding.