Approval Of Expense Reimbursement Submittals - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles ALNs 84.425/84.425C/84.425D/84.425U Elementary And Secondary School Emergency Relief Fund (ESSER) Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that expense reimbursement submittals on federal grants be approved by School management prior to their submission to the state for reimbursement. Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing School management?s approval of the expense reimbursement submittal for federal grants was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before expense reimbursement requests were submitted. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by School management for accuracy and completeness. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Not applicable. Recommendation: The School should maintain proper documentation for all expense reimbursement submittals.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Approval Of Expense Reimbursement Submittals - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles ALNs 84.425/84.425C/84.425D/84.425U Elementary And Secondary School Emergency Relief Fund (ESSER) Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that expense reimbursement submittals on federal grants be approved by School management prior to their submission to the state for reimbursement. Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing School management?s approval of the expense reimbursement submittal for federal grants was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before expense reimbursement requests were submitted. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by School management for accuracy and completeness. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Not applicable. Recommendation: The School should maintain proper documentation for all expense reimbursement submittals.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Approval Of Expense Reimbursement Submittals - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles ALNs 84.425/84.425C/84.425D/84.425U Elementary And Secondary School Emergency Relief Fund (ESSER) Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that expense reimbursement submittals on federal grants be approved by School management prior to their submission to the state for reimbursement. Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing School management?s approval of the expense reimbursement submittal for federal grants was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before expense reimbursement requests were submitted. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by School management for accuracy and completeness. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Not applicable. Recommendation: The School should maintain proper documentation for all expense reimbursement submittals.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Review And Approval Of The Schedule Of Expenditures Of Federal Awards (SEFA) - Significant Deficiency All Federal Programs Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School should have a process in place to perform a review of the SEFA, to include evidence of the resolution of variances, as well as a process to document the overall review and approval to ensure proper presentation, completeness, and accuracy of the SEFA. Condition: During the course of the audit, the engagement team identified multiple instances where the SEFA was not accurately prepared and presented. Specifically, there were federal expenditures that were misclassified to the incorrect federal grant. The SEFA was corrected to correctly classify these expenses in the current year. The engagement team identified this as a pervasive deficiency impacting all schools, as the SEFA was prepared by the same management personnel. Cause: The entity does not have an appropriate process in place to review the SEFA, to include retaining evidence of the resolution of variances, as well as documentation of the overall review and approval. Effect: Potential misstatement could occur if expenditure amounts are not accurately presented on the SEFA. Questioned Costs: Not applicable. Context: Not applicable. Identification As A Repeat Finding: Yes. Recommendation: The School should develop a consistent process to review the SEFA. Issues identified during the course of the review should be investigated and resolved in a timely manner.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372292255A25 (10/1/2021 ? 12/31/2024), UI356542155A25 (10/1/2020 ? 12/31/2023) Compliance Requirement: Special Tests and Provisions ? UI Benefit Payments Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL?s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA?s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): ? a minimum of 70 percent of cases must be completed within 60 days of the week ending date of the batch; ? 95 percent of cases must be completed within 90 days of the week ending date of the batch; ? a minimum of 98 percent of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (the Department) did not complete BAM case investigations within the time limits established in the ET Handbook No. 395. Context: Sixty cases were selected for testing. The Department did not meet the required time limits for closing cases within 90 or 120 days. Specifically, we noted the following exceptions: ? 90% of cases tested (54 of 60 cases) were closed within 90 days which is less than the required 95% ? 96.7% of cases tested (58 of 60 cases) were closed within 120 days which is less than the required 98% ? The remaining 3.3% of cases tested (2 of 60 cases) were closed from between 130 and 160 days. In addition, claims selected for testing by the Department must cover claims paid and denied claims. For 8 weeks selected for testing, only claims paid were selected for testing by the Department. Questioned costs: Undetermined. Cause: The Department?s procedures and controls were not sufficient to ensure it met the required BAM investigation time limits for closing cases and to ensure all claim types were part of weekly testing. Effect: Noncompliance with BAM case investigation time limits could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend the Division review and enhance procedures and controls to ensure that BAM case investigations are completed timely in accordance with the time limits established in the ET Handbook No. 395 and that both paid and denied claims are selected for testing. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both 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, ? Comply with the established accounting policies and practices of the non-Federal entity, ? 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. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both 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, ? Comply with the established accounting policies and practices of the non-Federal entity, ? 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. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: 2021-011 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? ETA 9130 Financial Report Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 9130, Financial Report ? All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. A separate ETA 9130 is submitted for each of these categories. Funds reserved and set aside for PFP contract strategies are required to be reported on ETA 9130 basic reports for each WIOA fund source utilized. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (the Department) was unable to provide documentation that ETA 9130 reports were completed and submitted in accordance with program requirements. Context: Reports for the 9/30/2021 and 6/30/2022 quarters were selected for testing. Separate reports are required to be submitted for each category and reporting level, resulting in a total of 75 samples selected for testing. The following exceptions were noted: ? 47 of 75 reports were not submitted timely. ? 4 of 75 reports were incomplete. ? 19 of 75 reports did not agree to supporting documentation. ? For 9 of 75 reports, documentation could not be provided that the reports had been reviewed by the Budget Supervisor and certified by the Director of Insurance. Cause: The Department?s procedures were not sufficient to ensure that ETA 9130 reports were completed in accordance with program requirements and that they were reviewed and approved prior to submission. Internal controls did not prevent or detect the errors. Effect: Reports were consistently submitted late and did not agree to supporting documentation. A lack of review and approval of reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial performance in the program. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over financial reporting to ensure that ETA 9130 reports are completed and submitted in accordance with program requirements. We further recommend that internal controls are enhanced to ensure that reports are reviewed and approved prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Condition: The Executive Office of Labor and Workforce Development (Department) did not report subaward information to FSRS. Context: Six subawards, including one subaward amendment, were selected for testing, totaling $10,422,414. None of the six subawards were reported to FSRS as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Allowable Costs/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR ? 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, ? Be incorporated into the official records of the non-Federal entity, ? Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, ? Encompass both 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, ? Comply with the established accounting policies and practices of the non-Federal entity, ? 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. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: One of sixty employee timesheets selected for testing did not use combination codes and the employee?s time was defaulted to a budgeted grant allocation. Therefore, the amount charged to the program was not based on the employee?s actual time and effort on the program. The program incurs direct payroll charges which represents approximately $5.8 million (17%) of total WIOA cluster spending. The Department implemented the use of combination codes within Self-Service Time and Attendance (SSTA), a module of the HR/CMS application in July 2019. Prior to this date, payroll was assigned to grants based on budgeted time and effort allocations maintained in the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). SSTA combination codes are used by employees to allocate and certify hours worked to Federal grants and employees? supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system will default to budgeted grant allocations entered into LCM. Cause: The Department?s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Payroll charges allocated to grants based on budgeted time and effort can result in federal reimbursements that are not reflective of actual time and effort working on a grant. Questioned costs: Undetermined. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-016 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-36325-21-55-A-25 (4/1/2021 ? 6/30/2024), AA-34774-20-55-A-25 (4/1/2020 ? 6/30/2023) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Subrecipient Monitoring - Per 2 CFR section 200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1)(xii) Assistance Listing number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listing Number at time of disbursement. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Labor and Workforce Development (Department) did not include all required information in a subaward agreement. Context: For one of six subawards selected for testing, the assistance listing number and federal award title was not included in the subaward agreement. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards included all required information. Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance internal controls and procedures to ensure that all required information is included in its subawards. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-014 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Cluster, COVID-19 ? Highway Planning and Construction Cluster Assistance Listing Number: 20.205, 20.219 Award Number and Year: (2021-2022) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department of Transportation (Department) could not provide support that it ensured its subrecipients were not suspended or debarred before issuing subawards to the entities. Context: The suspension and debarment status for 32 of 40 subrecipients selected for testing was not documented. Questioned costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Department did not establish effective internal controls for maintaining sufficient evidence that a suspension and debarment check was completed before issuing subawards. Effect: If the suspension and debarment status of subrecipients is not verified when entering into covered transactions, it is possible that a subaward could be issued to an ineligible entity. Recommendation: We recommend the Department implement controls and procedures to ensure it maintains documentation of suspension and debarments checks and that the documentation is available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-015 Prior Year Finding: 2021-018 Federal Agency: U.S. Department of the Treasury State Agency: Executive Officeof Housing and Livable Communities Federal Program: COVID-19 ? Emergency Rental Assistance Assistance Listing Number: 21.023 Award Number and Year: ERA-1 (12/27/2020 ? 9/30/2022), ERA-2 (5/1/2021 ? 9/30/2025) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Emergency Rental Assistance (ERA) 1 and ERA 2 state, local, and territorial recipients were required to submit monthly and quarterly reports to the United States Department of the Treasury (U.S. Treasury). Monthly reports are brief two-question updates through which ERA recipients provide U.S. Treasury with very high-level counts of the numbers of households receiving assistance and the amounts of ERA funds distributed. Monthly reports are due 15 days after the end of each month, with the exception of the December 2021 monthly report which was due January 18, 2022. Quarterly reports are in-depth reports with data on an array of programmatic and financial information to provide transparency in the use and progress of ERA funds. Monthly reports were required for each month of Fiscal Year 2022 and were due 15 days after the end of the month. Quarterly reports were required for each quarter of Fiscal Year 2022 and were due October 29, 2021, February 1, 2022, April 15, 2022, and July 15, 2022. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: Monthly reports for the period ending December 31, 2021 were not submitted timely by the Executive Office of Housing and Livable Communities (the Department). Context: We selected a sample of eight monthly reports (four each for ERA-1 and ERA-2) and four quarterly reports (two each for ERA-1 and ERA-2). We noted that the 12/31/2021 monthly reports for both ERA-1 and ERA-2 were due by 1/15/2022, but they were submitted on 3/18/2022, or 62 days late. Cause: The Department?s procedures and internal controls were not sufficient to ensure that monthly reports were submitted timely. Effect: The Department was not in compliance with monthly reporting requirements. Questioned costs: None. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that monthly reports are submitted timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ESSER grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. The CARES Act requires ESSER grantees to submit quarterly reports. This reporting requirement is satisfied through grantees? submission of the required monthly FFATA data through FSRS.gov. This monthly subaward data reported by States, along with data on awards to States, are pulled into the ESF Transparency Portal. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Year 2 Annual Report submitted by the Department of Elementary and Secondary Education (Department) for ESSER I did not agree to supporting documentation. Further, subaward information used for quarterly reports was not submitted to FSRS timely. Context: The Year 2 annual report submitted by the Department for ESSER I did not agree to supporting documentation. A variance of $37,604 was noted in the total amount expended on subrecipients in the prior year and the total amount of reserve expended directly in the prior reporting period. Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS, therefore, monthly FFATA data used to satisfy the quarterly reporting requirements was untimely. The subawards were reported to FSRS from one or four months later than required by FFATA reporting requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that the amounts reported for ESSER I agreed to supporting documentation nor that monthly subaward data used to satisfy quarterly reporting requirements was reported timely to FSRS. Effect: The total amount of prior year and current year subrecipient expenditures reported on the Year 2 Annual Report for ESSER I did not agree to supporting documentation. Monthly FFATA data used to satisfy quarterly reporting requirements was not submitted timely. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that amounts reported on the Annual Report agree to supporting documentation. We further recommend that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in order to satisfy quarterly reporting requirements for the program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: 2021-019 Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS. The subawards were reported from one or four months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: ESSER grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. The CARES Act requires ESSER grantees to submit quarterly reports. This reporting requirement is satisfied through grantees? submission of the required monthly FFATA data through FSRS.gov. This monthly subaward data reported by States, along with data on awards to States, are pulled into the ESF Transparency Portal. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Year 2 Annual Report submitted by the Department of Elementary and Secondary Education (Department) for ESSER I did not agree to supporting documentation. Further, subaward information used for quarterly reports was not submitted to FSRS timely. Context: The Year 2 annual report submitted by the Department for ESSER I did not agree to supporting documentation. A variance of $37,604 was noted in the total amount expended on subrecipients in the prior year and the total amount of reserve expended directly in the prior reporting period. Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS, therefore, monthly FFATA data used to satisfy the quarterly reporting requirements was untimely. The subawards were reported to FSRS from one or four months later than required by FFATA reporting requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that the amounts reported for ESSER I agreed to supporting documentation nor that monthly subaward data used to satisfy quarterly reporting requirements was reported timely to FSRS. Effect: The total amount of prior year and current year subrecipient expenditures reported on the Year 2 Annual Report for ESSER I did not agree to supporting documentation. Monthly FFATA data used to satisfy quarterly reporting requirements was not submitted timely. Questioned costs: Undetermined. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that amounts reported on the Annual Report agree to supporting documentation. We further recommend that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in order to satisfy quarterly reporting requirements for the program. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: 2021-019 Federal Agency: U.S. Department of Education State Agency: Department of Elementary and Secondary Education Federal Program: COVID-19 ? Elementary and Secondary School Emergency Relief Fund (ESSER) COVID-19 ? American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing Number: 84.425D, 84.425U Award Number and Year: S425D210025 (1/5/2021 ? 9/30/2022) 8425D200025 (5/4/2020 ? 9/30/2021) S425U210025 (3/4/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department of Elementary and Secondary Education (Department) did not report subaward information to FSRS timely. Context: Forty-two of sixty subrecipients selected for testing were not reported timely to FSRS. The subawards were reported from one or four months later than required by FFATA reporting requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS no later than the end of the month following the month of issuance. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply with guidance in ?Standards for Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) 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). Condition: Subaward information was not reported to FSRS during FY 2022. Context: None of the thirteen subrecipients selected for testing were reported to FSRS by the Executive Office of Housing and Livable Communities (the Department) during FY 2022. Total subawards selected were $90,808,866, and $0 was reported as required by FFATA requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Performance and Special Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? For the year ending September 30, 2021, state grantees must submit this report by March 31, 2022. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported. Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Housing and Livable Communities (the Department) did not submit performance and special reports timely. In addition, the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Context: Exceptions were noted for 2 of 3 reports selected for testing. We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP that were due during FY2022. Specifically, we noted the following exceptions: ? The LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 3/31/2022 but was not submitted until 4/12/2022, or 12 days late. ? Several line items on the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Questioned costs: None noted. Cause: The Department?s procedures were not sufficient to ensure that performance and special reports were submitted timely nor that information reported on the Annual Report on Households Assisted by LIHEAP was accurate and agreed with supporting documentation. Internal controls did not prevent or detect the errors. Effect: Delays and inaccuracies in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor. Recommendation: We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely and that the information reported agrees to supporting documentation. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-018 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. ?? 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply with guidance in ?Standards for Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) 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). Condition: Subaward information was not reported to FSRS during FY 2022. Context: None of the thirteen subrecipients selected for testing were reported to FSRS by the Executive Office of Housing and Livable Communities (the Department) during FY 2022. Total subawards selected were $90,808,866, and $0 was reported as required by FFATA requirements. Cause: The Department?s procedures and controls were not sufficient to ensure that subawards were reported to FSRS during FY 2022. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Department review and enhance procedures and internal controls to ensure that all required subawards are reported timely and accurately to FSRS no later than the end of the month following the month of issuance. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Housing and Livable Communities Federal Program: Low-Income Home Energy Assistance, COVID-19 ? Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2001MALIEA (10/1/2019 ? 9/30/2021) 2101MAE5C6 (3/11/2021 ? 9/30/2022) 2101MALIEA (10/10/2020 ? 9/30/2022) 2201MALIE4 (10/1/2021 ? 9/30/2023) 2201MALIEA (10/1/2021 ? 9/30/2023) 2201MALIEI (10/1/2021 ? 9/30/2023) Compliance Requirement: Reporting ? Performance and Special Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: LIHEAP Performance Data Form (OMB No 0970-0449) ? For the year ending September 30, 2021, state grantees must submit this report by March 31, 2022. The first section of the report is the Grantee Survey that covers sources and allocation of funding. The rest of the report is regarding performance metrics, mostly related to home energy burden targeting and reduction, as well as the continuity of home energy service. LIHEAP Carryover and Reallotment Report (OMB No. 0970-0106) ? Grantees must submit this report no later than August 1 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds in excess of the maximum carryover limit are subject to reallotment to other LIHEAP grantees in the following fiscal year and must also be reported. Annual Report on Households Assisted by LIHEAP (OMB No. 0970-0060) ? As part of the application for block grant funds each year, a report is required for the preceding fiscal year of (1) the number and income levels of the households assisted for each component and any type of LHEAP assistance (heating, cooling, crisis, and weatherization); and (2) the number of households served that contained young children, elderly, or persons with disabilities, or any vulnerable household for each component. Territories with annual allotments of less than $200,000 and all Indian tribes are required to report only on the number of households served for each program component. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Executive Office of Housing and Livable Communities (the Department) did not submit performance and special reports timely. In addition, the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Context: Exceptions were noted for 2 of 3 reports selected for testing. We selected for testing the LIHEAP Performance Data Form, the LIHEAP Carryover and Reallotment Report, and the Annual Report on Households Assisted by LIHEAP that were due during FY2022. Specifically, we noted the following exceptions: ? The LIHEAP Performance Data Forms was not submitted timely. The report for the period ending 9/30/2021 was due by 3/31/2022 but was not submitted until 4/12/2022, or 12 days late. ? Several line items on the Annual Report on Households Assisted by LIHEAP did not agree to supporting documentation. Questioned costs: None noted. Cause: The Department?s procedures were not sufficient to ensure that performance and special reports were submitted timely nor that information reported on the Annual Report on Households Assisted by LIHEAP was accurate and agreed with supporting documentation. Internal controls did not prevent or detect the errors. Effect: Delays and inaccuracies in submission of annual performance and special reports could impact the Federal agency?s ability to manage the program, could result in delays in annual awards, and possible penalties or sanctions could be imposed by the grantor. Recommendation: We recommend that the Department review and enhance its procedures and internal controls to ensure that performance and special reports are submitted timely and that the information reported agrees to supporting documentation. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
Reference Number: 2022-020 Prior Year Finding: 2021-024 (Medicaid Only) Federal Agency: U.S. Department of Health and Human Services State Agency: Executive Office of Health and Human Services Federal Program: Medicaid Cluster, COVID-19 ? Medicaid Cluster Children?s Health Insurance Program, COVID-19 ? Children?s Health Insurance Program Assistance Listing Number: 93.775, 93.777, 93.778 (Medicaid) 93.767 (CHIP) Award Number and Year: XIX-MAP21, XIX-MAP-22 (Medicaid) 2105MA5021, 2205MA5021 (CHIP) Compliance Requirement: Special Tests and Provisions - Provider Health and Safety Standards Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Providers must meet the prescribed health and safety standards for hospital, nursing facilities, and ICF/IID (42 CFR Part 442). The standards may be modified in the state plan. Control: Per 2 CFR section 200.303(a), 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. These internal controls should comply 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). Condition: The Department did not provide documentation to support the eligibility recertification for the organizations within the group practice. The recertification was not completed by the third-party administrator within the five-year cycle for the organizations in the group practice. We identified three Medicaid and six CHIP providers within the group practice whose recertification was not completed in a timely manner. Context: Three of the sixty Medicaid and 6 out of sixty CHIP providers selected for testing, did not provide documentation to support recertification of eligibility. Cause: The Department did not maintain documentation to support the performance of the providers? eligibility recertification process. Effect: The Department is unable to support compliance with the federal requirement. Questioned costs: Undetermined. Recommendation: We recommend that the Department maintain documentation to support the determination or redetermination of provider eligibility. Views of Responsible Officials: Management agrees with the finding.
FINDING 2022-009 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed or implemented at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. INDIANA STATE BOARD OF ACCOUNTS 35 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Three construction contracts, totaling $5,836,924, were paid from the COVID-19 - Education Stabilization Fund grant funds during the audit period. For three of three contracts reviewed, the required prevailing wage rate clause was not included in the contract, nor were certified payrolls submitted by the contractors. The lack of internal controls and failure to maintain and provide adequate supporting documentation were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (ii) INDIANA STATE BOARD OF ACCOUNTS 36 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-010 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation paid $4,173,474 for roof improvements at five locations. These capital improvements were not added to a detailed listing of capital assets that would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and the use and condition of the property. In addition, a physical inventory had not been taken in the past two years. Assets were not properly safeguarded and maintained. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at lease once every two years. INDIANA STATE BOARD OF ACCOUNTS 38 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-009 Subject: COVID-19 - Education Stabilization Fund - Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not designed or implemented at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Construction contracts in excess of $2,000 financed by federal assistance funds must pay wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) to their laborers and mechanics. Nonfederal entities are to include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor or subcontractor comply with these requirements and the DOL regulations. This would include a requirement to submit a copy of the payroll and statement of compliance to the entity for each week in which contract work was performed. INDIANA STATE BOARD OF ACCOUNTS 35 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation had not designed nor implemented a system of internal controls to ensure that construction contracts in excess of $2,000 paid from federal grant funds included a prevailing wage rate clause. Three construction contracts, totaling $5,836,924, were paid from the COVID-19 - Education Stabilization Fund grant funds during the audit period. For three of three contracts reviewed, the required prevailing wage rate clause was not included in the contract, nor were certified payrolls submitted by the contractors. The lack of internal controls and failure to maintain and provide adequate supporting documentation were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: "(a) The Agency head shall cause or require the contracting officer to insert in full in any contract in excess of $2,000 which is entered into for the actual construction, alteration and/or repair, including painting and decorating, of a public building or public work, or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan, grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to the labor standards provisions of any of the acts listed in ? 5.1, the following clauses . . . (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics. . . . (3) Payrolls and basic records. . . . (ii) INDIANA STATE BOARD OF ACCOUNTS 36 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). . . ." 2 CFR 200 Appendix II states in part: "In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non- Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, "Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction"). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Special Tests and Provisions - Wage Rate Requirements compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-010 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation paid $4,173,474 for roof improvements at five locations. These capital improvements were not added to a detailed listing of capital assets that would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and the use and condition of the property. In addition, a physical inventory had not been taken in the past two years. Assets were not properly safeguarded and maintained. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at lease once every two years. INDIANA STATE BOARD OF ACCOUNTS 38 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective system of internal controls enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: The Code of Federal Regulations (CFR) Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal over federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The organization should have internal controls to ensure that costs charged to federal awards comply with the cost principles contained in Subpart E ? Cost Principles (2 CFR 200.400). Condition: While the Lexington Center Corporation had more than sufficient qualifying costs in excess of the federal award amount, personnel costs previously credited through the Employee Retention Credit (ERC) were coded to the federal award. Pursuant to section 3134(h)(1)(B) and (C) of the Internal Revenue Code, employers may not treat qualified wages used in connection with the ERC also for the Shuttered Venue Operators Grant. Cause: The Lexington Center Corporation did not have policies and procedures over cost principles establishing the allowability of certain items of costs in accordance with allocability standards. Effect: Noncompliance such as unallowable costs charged to the federal award could occur and not be detected or corrected. Audit Recommendation: We recommend that management implement procedures over the administration of federal awards, including establishing written policies and procedures to ensure compliance with Uniform Guidance cost principles. Management?s Response: Federal awards received by Lexington Center Corporation spanned the course of two and half years and a major change in management from in-house to a private management company. The expenses submitted under the ERC were done so prior to Oak View Group management, with the expenses submitted under the SVOG overlapping the two management regimes. Management has sufficient qualifying costs for corrective action in this particular circumstance and will be identifying controls that ensure corrective action will not be needed in future circumstances.
2022-001 - Significant Deficiency in Internal Control - Reporting Federal Program: COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: N/A Award Number: N/A Award Year: 2020 Compliance Requirement: Activities Allowed or Unallowed, Allowable Cost/Cost Principles, Reporting Questioned Costs: None Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Recipients of Provider Relief Fund (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context: The Organization did not complete the PRF reporting for Period 2 in accordance with the U.S. Department of Health and Human Services guidance. In the Organization's Option i calculation, the Organization inadvertently excluded from their reporting certain amounts attributable to implicit price concessions when determining net patient service revenue used to calculate lost revenue. The adjustment needed within the PRF report to correct the exclusion of implicit price concessions decreased cumulative total year-over-year lost revenues from $2,727,305 to $2,471,405 on total cumulative reported distributions of PRF funding of $1,161,130. Effect: The amounts reported to the Health Resources and Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: An ineffective review control did not identify the error in the underlying calculation. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Additionally, we recommend that management update the reported revenue information in the PRF reporting portal during the next reporting period. View of Responsible Officials: Management agrees with the above noted finding and has updated their review process to be more effective. Management will also update the amounts in the PRF reporting portal during the next available reporting period.
FINDING 2022-002 Subject: Special Education Cluster - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Number and Year (or Other Identifying Numbers): 19611-042-PN01, 20611-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Earmarking Audit Finding: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Condition: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). The School Corporation did not have adequate internal controls in place to ensure that the Cooperative complied with the earmarking requirements. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 19611-042-PN01 and 20611-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to IDOE as required. The School Corporation?s minimum earmarking requirements for the 19611-042-PN01 and 20611-042-PN01 grant awards were $1,095 and $1,791, respectively. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01 and 20611-042-PN01, grant awards. Identification of repeat finding: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Subject: Special Education Cluster - Earmarking Federal Agency: Department of Education Federal Program: Special Education Grants to States, Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.173 Federal Award Number and Year (or Other Identifying Numbers): 19611-042-PN01, 20611-042-PN01, 21611-042-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Earmarking Audit Finding: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)...." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (g) Be adequately documented.... " 2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjust specific Federal award conditions as needed . . ." 511 IAC 7-34-7(b) states: "The public agency, in providing special education and related services to students in nonpublic schools must expend at least an amount that is the same proportion of the public agency total subgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities, who are enrolled by their parents in nonpublic schools within its boundaries, is to the total number of students with disabilities of the same age range." Condition: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). The School Corporation did not have adequate internal controls in place to ensure that the Cooperative complied with the earmarking requirements. Cause: The School Corporation's management had not developed an effective system of internal controls that would have ensured compliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Effect: The failure to establish an effective internal control system, as well as adequately document costs of federal awards, prevented the determination of the School Corporation's compliance with the earmarking requirements of the Matching, Level of Effort, Earmarking compliance requirement. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of the Northeast Indiana Special Education Cooperative (Cooperative). During fiscal year 2021-2022, the Cooperative operated the special education programs and spent the federal money on behalf of all its members. As the grant agreements were between the Indiana Department of Education (IDOE) and each member school, the School Corporation was responsible for ensuring and providing oversight of the Cooperative. However, there was inadequate oversight performed by the School Corporation in order to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. The School Corporation did not have internal controls in place to ensure that the Cooperative complied with the earmarking requirements. The Cooperative did not have adequate procedures in place to ensure that the required level of expenditures for non-public students with disabilities was met for each member school. The Cooperative did not have effective internal controls to ensure non-public school expenditures were appropriately identified and reported. The Non-Public Proportionate Share expenditures for 19611-042-PN01 and 20611-042-PN01 grant awards could not be verified for the individual schools to verify the minimum amount per the grant awards was expended and properly reported to IDOE as required. The School Corporation?s minimum earmarking requirements for the 19611-042-PN01 and 20611-042-PN01 grant awards were $1,095 and $1,791, respectively. The lack of internal controls and noncompliance were isolated to the 19611-042-PN01 and 20611-042-PN01, grant awards. Identification of repeat finding: No Recommendation: We recommended that the School Corporation's management establish a system of internal controls, as well as appropriately document and identify federal award expenditures to ensure compliance with the Matching, Level of Effort, Earmarking compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.