2022-007: Internal Control over Compliance with Reporting Requirements Program: U.S. Department of Housing and Urban Development AL Number: 14.195 AL Name: Section 8 Housing Assistance Payments Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Milwaukee Housing Authority February 4, 2009 through February 4, 2024 City of Milwaukee Housing Authority January 27, 2014 through January 27, 2029 City of Madison Housing Authority June 1, 2016 through May 31, 2031 City of Madison Housing Authority June 20, 2018 through June 20, 2033 Dane County Housing Authority June 1, 2016 through May 29, 2031 Dane County Housing Authority June 20, 2018 through June 20, 2033 Milwaukee County Housing July 15, 2011 through July 15, 2026 Chicago Housing Authority March 1, 2012 through February 28, 2041 Chicago Housing Authority March 1, 2012 through March 31, 2043 Chicago Housing Authority April 1, 2013 through March 31, 2044 Chicago Housing Authority August 27, 2014 through July 31, 2044 Chicago Housing Authority January 1, 2016 through December 31, 2035 Chicago Housing Authority January 9, 2020 through December 31, 2034 Chicago Housing Authority January 23, 2020 through December 31, 2034 Chicago Housing Authority March 1, 2020 through February 28, 2050 Program: U.S. Department of Housing and Urban Development AL Number: 14.249 AL Name: Section 8 Moderate Rehabilitation Single Room Occupancy Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period Chicago Housing Authority March 12, 2020 through March 13, 2022 Chicago Housing Authority December 17, 2020 through December 16, 2022 Program: U.S. Department of Housing and Urban Development AL Number: 14.239 AL Name: Home Investment Partnerships Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago April 22, 2019 through April 21, 2034 City of Chicago June 15, 1993 through July 13, 2033 City of Chicago October 3, 2003 through July 2050 Illinois Housing Development Authority January 16, 1997 through January 16, 2027 City of Milwaukee April 17, 2008 through April 21, 2028 City of Milwaukee November 1, 2017 through October 31, 2051 City of Milwaukee August 21, 2020 through August 20, 2040 Program: U.S. Department of Housing and Urban Development AL Number: 14.181 AL Name: Supportive Housing for Persons with Disabilities (Section 811) Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago January 1, 2003 through January 1, 2043 City of Chicago March 30, 2007 through March 30, 2039 Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Program: U.S. Department of Veterans Affairs AL Number: 64.033 AL Name: VA Supportive Services for Veteran Families Program Grant Award Numbers under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO19CA0226 December 1, 2020 through June 30, 2022 N/A December 1, 2020 through June 30, 2022 N/A February 1, 2021 through September 30, 2022 SPRMCO20CA0209 October 1, 2019 through September 30, 2022 Criteria ? CFR ?200.303 Internal Controls, section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its reporting process. 2 CFR section 200.512(a) states that the data collection form and reporting package must be submitted the earlier of 30 calendar days after receipt of the auditor?s reports or nine months after the end of the audit period to the Federal Audit Clearinghouse (FAC). If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. The Uniform Guidance does not have a provision addressing whether the cognizant or oversight agencies may extend due dates. Condition ? During the fiscal year, we noted that the Organization failed to submit the data collection form and reporting package to FAC on a timely basis. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure timely submission of required reports to federal funding source. Questioned Costs ? There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports. Effect - Failure to properly track all reporting submission deadlines could lead to delayed funding. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend management adhere to its documented policies and procedures and the documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis. Further, we recommend management implement a policy of formally tracking all required reports and submission deadlines to address the delayed submissions identified above. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with reporting requirements. Management plans to adhere to documented policies and procedures and documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis.
2022-007: Internal Control over Compliance with Reporting Requirements Program: U.S. Department of Housing and Urban Development AL Number: 14.195 AL Name: Section 8 Housing Assistance Payments Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Milwaukee Housing Authority February 4, 2009 through February 4, 2024 City of Milwaukee Housing Authority January 27, 2014 through January 27, 2029 City of Madison Housing Authority June 1, 2016 through May 31, 2031 City of Madison Housing Authority June 20, 2018 through June 20, 2033 Dane County Housing Authority June 1, 2016 through May 29, 2031 Dane County Housing Authority June 20, 2018 through June 20, 2033 Milwaukee County Housing July 15, 2011 through July 15, 2026 Chicago Housing Authority March 1, 2012 through February 28, 2041 Chicago Housing Authority March 1, 2012 through March 31, 2043 Chicago Housing Authority April 1, 2013 through March 31, 2044 Chicago Housing Authority August 27, 2014 through July 31, 2044 Chicago Housing Authority January 1, 2016 through December 31, 2035 Chicago Housing Authority January 9, 2020 through December 31, 2034 Chicago Housing Authority January 23, 2020 through December 31, 2034 Chicago Housing Authority March 1, 2020 through February 28, 2050 Program: U.S. Department of Housing and Urban Development AL Number: 14.249 AL Name: Section 8 Moderate Rehabilitation Single Room Occupancy Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period Chicago Housing Authority March 12, 2020 through March 13, 2022 Chicago Housing Authority December 17, 2020 through December 16, 2022 Program: U.S. Department of Housing and Urban Development AL Number: 14.239 AL Name: Home Investment Partnerships Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago April 22, 2019 through April 21, 2034 City of Chicago June 15, 1993 through July 13, 2033 City of Chicago October 3, 2003 through July 2050 Illinois Housing Development Authority January 16, 1997 through January 16, 2027 City of Milwaukee April 17, 2008 through April 21, 2028 City of Milwaukee November 1, 2017 through October 31, 2051 City of Milwaukee August 21, 2020 through August 20, 2040 Program: U.S. Department of Housing and Urban Development AL Number: 14.181 AL Name: Supportive Housing for Persons with Disabilities (Section 811) Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago January 1, 2003 through January 1, 2043 City of Chicago March 30, 2007 through March 30, 2039 Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Program: U.S. Department of Veterans Affairs AL Number: 64.033 AL Name: VA Supportive Services for Veteran Families Program Grant Award Numbers under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO19CA0226 December 1, 2020 through June 30, 2022 N/A December 1, 2020 through June 30, 2022 N/A February 1, 2021 through September 30, 2022 SPRMCO20CA0209 October 1, 2019 through September 30, 2022 Criteria ? CFR ?200.303 Internal Controls, section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its reporting process. 2 CFR section 200.512(a) states that the data collection form and reporting package must be submitted the earlier of 30 calendar days after receipt of the auditor?s reports or nine months after the end of the audit period to the Federal Audit Clearinghouse (FAC). If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. The Uniform Guidance does not have a provision addressing whether the cognizant or oversight agencies may extend due dates. Condition ? During the fiscal year, we noted that the Organization failed to submit the data collection form and reporting package to FAC on a timely basis. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure timely submission of required reports to federal funding source. Questioned Costs ? There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports. Effect - Failure to properly track all reporting submission deadlines could lead to delayed funding. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend management adhere to its documented policies and procedures and the documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis. Further, we recommend management implement a policy of formally tracking all required reports and submission deadlines to address the delayed submissions identified above. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with reporting requirements. Management plans to adhere to documented policies and procedures and documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis.
2022-007: Internal Control over Compliance with Reporting Requirements Program: U.S. Department of Housing and Urban Development AL Number: 14.195 AL Name: Section 8 Housing Assistance Payments Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Milwaukee Housing Authority February 4, 2009 through February 4, 2024 City of Milwaukee Housing Authority January 27, 2014 through January 27, 2029 City of Madison Housing Authority June 1, 2016 through May 31, 2031 City of Madison Housing Authority June 20, 2018 through June 20, 2033 Dane County Housing Authority June 1, 2016 through May 29, 2031 Dane County Housing Authority June 20, 2018 through June 20, 2033 Milwaukee County Housing July 15, 2011 through July 15, 2026 Chicago Housing Authority March 1, 2012 through February 28, 2041 Chicago Housing Authority March 1, 2012 through March 31, 2043 Chicago Housing Authority April 1, 2013 through March 31, 2044 Chicago Housing Authority August 27, 2014 through July 31, 2044 Chicago Housing Authority January 1, 2016 through December 31, 2035 Chicago Housing Authority January 9, 2020 through December 31, 2034 Chicago Housing Authority January 23, 2020 through December 31, 2034 Chicago Housing Authority March 1, 2020 through February 28, 2050 Program: U.S. Department of Housing and Urban Development AL Number: 14.249 AL Name: Section 8 Moderate Rehabilitation Single Room Occupancy Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period Chicago Housing Authority March 12, 2020 through March 13, 2022 Chicago Housing Authority December 17, 2020 through December 16, 2022 Program: U.S. Department of Housing and Urban Development AL Number: 14.239 AL Name: Home Investment Partnerships Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago April 22, 2019 through April 21, 2034 City of Chicago June 15, 1993 through July 13, 2033 City of Chicago October 3, 2003 through July 2050 Illinois Housing Development Authority January 16, 1997 through January 16, 2027 City of Milwaukee April 17, 2008 through April 21, 2028 City of Milwaukee November 1, 2017 through October 31, 2051 City of Milwaukee August 21, 2020 through August 20, 2040 Program: U.S. Department of Housing and Urban Development AL Number: 14.181 AL Name: Supportive Housing for Persons with Disabilities (Section 811) Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago January 1, 2003 through January 1, 2043 City of Chicago March 30, 2007 through March 30, 2039 Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Program: U.S. Department of Veterans Affairs AL Number: 64.033 AL Name: VA Supportive Services for Veteran Families Program Grant Award Numbers under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO19CA0226 December 1, 2020 through June 30, 2022 N/A December 1, 2020 through June 30, 2022 N/A February 1, 2021 through September 30, 2022 SPRMCO20CA0209 October 1, 2019 through September 30, 2022 Criteria ? CFR ?200.303 Internal Controls, section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its reporting process. 2 CFR section 200.512(a) states that the data collection form and reporting package must be submitted the earlier of 30 calendar days after receipt of the auditor?s reports or nine months after the end of the audit period to the Federal Audit Clearinghouse (FAC). If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. The Uniform Guidance does not have a provision addressing whether the cognizant or oversight agencies may extend due dates. Condition ? During the fiscal year, we noted that the Organization failed to submit the data collection form and reporting package to FAC on a timely basis. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure timely submission of required reports to federal funding source. Questioned Costs ? There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports. Effect - Failure to properly track all reporting submission deadlines could lead to delayed funding. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend management adhere to its documented policies and procedures and the documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis. Further, we recommend management implement a policy of formally tracking all required reports and submission deadlines to address the delayed submissions identified above. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with reporting requirements. Management plans to adhere to documented policies and procedures and documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis.
2022-007: Internal Control over Compliance with Reporting Requirements Program: U.S. Department of Housing and Urban Development AL Number: 14.195 AL Name: Section 8 Housing Assistance Payments Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Milwaukee Housing Authority February 4, 2009 through February 4, 2024 City of Milwaukee Housing Authority January 27, 2014 through January 27, 2029 City of Madison Housing Authority June 1, 2016 through May 31, 2031 City of Madison Housing Authority June 20, 2018 through June 20, 2033 Dane County Housing Authority June 1, 2016 through May 29, 2031 Dane County Housing Authority June 20, 2018 through June 20, 2033 Milwaukee County Housing July 15, 2011 through July 15, 2026 Chicago Housing Authority March 1, 2012 through February 28, 2041 Chicago Housing Authority March 1, 2012 through March 31, 2043 Chicago Housing Authority April 1, 2013 through March 31, 2044 Chicago Housing Authority August 27, 2014 through July 31, 2044 Chicago Housing Authority January 1, 2016 through December 31, 2035 Chicago Housing Authority January 9, 2020 through December 31, 2034 Chicago Housing Authority January 23, 2020 through December 31, 2034 Chicago Housing Authority March 1, 2020 through February 28, 2050 Program: U.S. Department of Housing and Urban Development AL Number: 14.249 AL Name: Section 8 Moderate Rehabilitation Single Room Occupancy Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period Chicago Housing Authority March 12, 2020 through March 13, 2022 Chicago Housing Authority December 17, 2020 through December 16, 2022 Program: U.S. Department of Housing and Urban Development AL Number: 14.239 AL Name: Home Investment Partnerships Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago April 22, 2019 through April 21, 2034 City of Chicago June 15, 1993 through July 13, 2033 City of Chicago October 3, 2003 through July 2050 Illinois Housing Development Authority January 16, 1997 through January 16, 2027 City of Milwaukee April 17, 2008 through April 21, 2028 City of Milwaukee November 1, 2017 through October 31, 2051 City of Milwaukee August 21, 2020 through August 20, 2040 Program: U.S. Department of Housing and Urban Development AL Number: 14.181 AL Name: Supportive Housing for Persons with Disabilities (Section 811) Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago January 1, 2003 through January 1, 2043 City of Chicago March 30, 2007 through March 30, 2039 Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Program: U.S. Department of Veterans Affairs AL Number: 64.033 AL Name: VA Supportive Services for Veteran Families Program Grant Award Numbers under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO19CA0226 December 1, 2020 through June 30, 2022 N/A December 1, 2020 through June 30, 2022 N/A February 1, 2021 through September 30, 2022 SPRMCO20CA0209 October 1, 2019 through September 30, 2022 Criteria ? CFR ?200.303 Internal Controls, section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its reporting process. 2 CFR section 200.512(a) states that the data collection form and reporting package must be submitted the earlier of 30 calendar days after receipt of the auditor?s reports or nine months after the end of the audit period to the Federal Audit Clearinghouse (FAC). If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. The Uniform Guidance does not have a provision addressing whether the cognizant or oversight agencies may extend due dates. Condition ? During the fiscal year, we noted that the Organization failed to submit the data collection form and reporting package to FAC on a timely basis. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure timely submission of required reports to federal funding source. Questioned Costs ? There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports. Effect - Failure to properly track all reporting submission deadlines could lead to delayed funding. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend management adhere to its documented policies and procedures and the documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis. Further, we recommend management implement a policy of formally tracking all required reports and submission deadlines to address the delayed submissions identified above. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with reporting requirements. Management plans to adhere to documented policies and procedures and documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis.
2022-007: Internal Control over Compliance with Reporting Requirements Program: U.S. Department of Housing and Urban Development AL Number: 14.195 AL Name: Section 8 Housing Assistance Payments Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Milwaukee Housing Authority February 4, 2009 through February 4, 2024 City of Milwaukee Housing Authority January 27, 2014 through January 27, 2029 City of Madison Housing Authority June 1, 2016 through May 31, 2031 City of Madison Housing Authority June 20, 2018 through June 20, 2033 Dane County Housing Authority June 1, 2016 through May 29, 2031 Dane County Housing Authority June 20, 2018 through June 20, 2033 Milwaukee County Housing July 15, 2011 through July 15, 2026 Chicago Housing Authority March 1, 2012 through February 28, 2041 Chicago Housing Authority March 1, 2012 through March 31, 2043 Chicago Housing Authority April 1, 2013 through March 31, 2044 Chicago Housing Authority August 27, 2014 through July 31, 2044 Chicago Housing Authority January 1, 2016 through December 31, 2035 Chicago Housing Authority January 9, 2020 through December 31, 2034 Chicago Housing Authority January 23, 2020 through December 31, 2034 Chicago Housing Authority March 1, 2020 through February 28, 2050 Program: U.S. Department of Housing and Urban Development AL Number: 14.249 AL Name: Section 8 Moderate Rehabilitation Single Room Occupancy Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period Chicago Housing Authority March 12, 2020 through March 13, 2022 Chicago Housing Authority December 17, 2020 through December 16, 2022 Program: U.S. Department of Housing and Urban Development AL Number: 14.239 AL Name: Home Investment Partnerships Program Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago April 22, 2019 through April 21, 2034 City of Chicago June 15, 1993 through July 13, 2033 City of Chicago October 3, 2003 through July 2050 Illinois Housing Development Authority January 16, 1997 through January 16, 2027 City of Milwaukee April 17, 2008 through April 21, 2028 City of Milwaukee November 1, 2017 through October 31, 2051 City of Milwaukee August 21, 2020 through August 20, 2040 Program: U.S. Department of Housing and Urban Development AL Number: 14.181 AL Name: Supportive Housing for Persons with Disabilities (Section 811) Grant Award Numbers under the Uniform Guidance Requirements: Pass-Through Entity Award Period City of Chicago January 1, 2003 through January 1, 2043 City of Chicago March 30, 2007 through March 30, 2039 Program: U.S. Department of State AL Number: 19.016 AL Name: Iraq Assistance Program Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SLMAQM19GR2288 September 29, 2019 through June 30,2022 Program: U.S. Department of State AL Number: 19.518 AL Name: Overseas Refugee Assistance Program for Western Hemisphere Grant Award Numbers Under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO20CA0209 September 20, 2020 through September 29, 2021 N/A September 20, 2021 through September 29, 2022 Program: U.S. Department of Veterans Affairs AL Number: 64.033 AL Name: VA Supportive Services for Veteran Families Program Grant Award Numbers under the Uniform Guidance Requirements: Direct Award Number Award Period SPRMCO19CA0226 December 1, 2020 through June 30, 2022 N/A December 1, 2020 through June 30, 2022 N/A February 1, 2021 through September 30, 2022 SPRMCO20CA0209 October 1, 2019 through September 30, 2022 Criteria ? CFR ?200.303 Internal Controls, section (a) states the Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its reporting process. 2 CFR section 200.512(a) states that the data collection form and reporting package must be submitted the earlier of 30 calendar days after receipt of the auditor?s reports or nine months after the end of the audit period to the Federal Audit Clearinghouse (FAC). If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. The Uniform Guidance does not have a provision addressing whether the cognizant or oversight agencies may extend due dates. Condition ? During the fiscal year, we noted that the Organization failed to submit the data collection form and reporting package to FAC on a timely basis. Cause ? Policies and procedures were not appropriately adhered to in certain instances to ensure timely submission of required reports to federal funding source. Questioned Costs ? There are no questioned costs as the items outlined above are internal control related matters and not matters related to the accuracy of the information reported to the awarding agency in the financial reports. Effect - Failure to properly track all reporting submission deadlines could lead to delayed funding. Repeat Finding - This finding is not a repeat finding. Recommendation - We recommend management adhere to its documented policies and procedures and the documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis. Further, we recommend management implement a policy of formally tracking all required reports and submission deadlines to address the delayed submissions identified above. Views of Responsible Officials - Management agrees with the finding and takes responsibility to comply with reporting requirements. Management plans to adhere to documented policies and procedures and documented instructions for reporting requirements contained within grant agreements to ensure that the required reports are properly submitted to the federal government on a timely basis.
Finding number: 2022 001 Federal agency: U.S. Department of Education Pass through agency: Massachusetts Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: 305 532937 2022 0035 Award year: September 1, 2021 to June 30, 2023 Finding: Internal Control and Compliance over Payroll Costs Prior Year Finding: 2018 001 Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, as well as weekly time and effort reporting worksheets. The timesheets are then reviewed by each employee?s supervisor and the worksheets are reviewed by the Department Head or designee, ensuring appropriate salary and wage distribution. However, for our sample of 40 payroll transactions charged to the program, 6 transactions were not supported by a completed timesheet. Cause This appears to be due to an insufficient system for collecting, filing and maintaining supporting documentation for payroll transactions charged to Federal programs. Effect BPS is not in compliance with 2 CFR 200.430(i)(1) regarding documentation in support of salaries and wages charge to the federal program. The number of transactions that were not supported by a time sheet represent 15% of the selected population and indicate a systemic problem. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Questioned costs of $24,188, for unsupported payroll charges, were charged to ALN # 84.010, Award No. 305 532937 2022 0035. Recommendation We recommend that BPS implement control procedures to ensure that all payroll costs charged to the federal program are supported by documentation as required by 2 CFR 200.430(i)(1). View of Responsible Officials from the Auditee The District will revert back to the previously approved Google Form process for daily sign in and sign out procedures. This form is authenticated through IT and managed in a centralized repository making it easier to recall data for auditing and validate for weekly time reporting. The District created a new office of Compliance and Risk Management. The office will audit and review the established process quarterly to ensure integrity of the process.
Finding number: 2022 002 Federal agency: U.S. Department of Education Pass through agency: Massachusetts Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control over Reporting Prior Year Finding: No Type of Finding: Significant Deficiency Criteria The City of Boston Public Schools (BPS) receives funding from the Commonwealth of Massachusetts? Department of Elementary and Secondary Education (DESE). DESE sets policy for the grants and required reports. DESE issues guidance in Grants for Schools: Getting Them and Using them, A Procedural Manual. According to the DESE?s procedure manual, ?At the conclusion of grant activities, recipients must submit a final financial report to the Department, accounting for the expenditure of funds received. Grants Management has developed an online process and standard form (FR1) for collecting this information. The FR1 form should be submitted to Grants Management within sixty (60) days of the end date of the grant. Grant recipients should file their reports after carefully reconciling all figures with their city auditor, town accountant, or agency business manager.? Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our review of compliance with subrecipient reporting requirements for the Title I program, we noted that, for our sample of 4 of the population of 13 FR1 reports required to be filed in fiscal year 2022, 3 reports were filed over a year after the respective grant period ended. Cause This appears to be due to inadequate policies and procedures surrounding the filing of financial reports under the program. Effect BPS does not have effective internal controls over the Federal award in regard to the primary recipient?s Title I program reporting requirements. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS implement control procedures to ensure that the FR1 form be submitted to DESE Grants Management within sixty (60) days of the end date of the grant in accordance with the reporting requirements of the primary Federal recipient of the Title I program. View of Responsible Officials from the Auditee The Finance Department at Boston Public Schools will implement an internal fiscal tracker to monitor and update on a quarterly basis to reflect reporting timelines and ensure timely spending of all grant funds. In addition, BPS will create a grant close procedure document that outlines the roles, responsibilities, and tasks associated with completing the FR1.
Finding number: 2022 003 Federal agency: U.S. Department of Education Pass through agency: Massachusetts Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: Various Award year: Various Finding: Internal Control and Compliance over Annual Report Card, High School Graduation Rate Prior Year Finding: Yes 2021 002 Type of Finding: Material Weakness Criteria Beginning with annual report cards providing assessment results for the 2010?2011 school year, a State educational agency (SEA) and its local education agencies (LEAs) must report graduation rate data for all public high schools at the school, LEA, and State levels using the 4 year adjusted cohort rate under 34 CFR section 200.19(b)(1)(i) (iv)). Additionally, SEAs and LEAs must include the 4 year adjusted cohort graduation rate (which may be combined with an extended year adjusted cohort graduation rate or rates) in adequate yearly progress (AYP) determinations beginning with determinations based on assessments administered in the 2011?2012 school year. Graduation rate data must be reported both in the aggregate and disaggregated by each subgroup described in 34 CFR section 200.13(b)(7)(ii) using a 4 year adjusted cohort graduation rate. To remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition For 9 of 60 students removed from their respective cohorts in the Student Information Management System (SIMS) selected for testing, the City of Boston Public Schools (BPS) could not provide any official written documentation that the student emigrated to another country, is deceased, or is enrolled in another school or in an education program that culminates in the award of a regular high school diploma. Cause This appears to be due to insufficient review of supporting documentation before removal of students from the adjusted cohort graduation rate. Effect BPS is potentially misstating the number of students in the adjusted cohorts used by the Commonwealth of Massachusetts to determine the 4 year adjusted cohort graduation rate. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation BPS management should re familiarize and re enforce the requirements with staff related to the removal of students from the adjusted cohorts used to determine the 4 year adjusted cohort graduation rate and the policies and procedures to obtain and monitor official written documentation of student transfers required to remove students from their respective cohort. View of Responsible Officials from the Auditee Between April and June 2022, the district contracted with Ernst and Young to complete a review of withdrawal processes and make recommendations to improve monitoring and internal audit processes. In August 2022, the district formed a student withdrawal working group, which created a process memo to support the appropriate withdrawal process for students in grades 9 12. At the August Management and Operations Institute, the student withdrawal working group was able to communicate and train school leaders and their administration on the appropriate withdrawal processes for students. Throughout the fall and winter, the student withdrawal working group has been monitoring the number of students withdrawn from the district; reviewing associated documentation of the withdrawal; and working with school leaders and school administration both at the central office level as well as through the liaisons and leaders within the regional structure to upload appropriate withdrawal documentation or update withdrawal codes to reflect the evidence associated with each student?s withdrawal case.
Finding number: 2022 004 Federal agency: U.S. Department of Education Pass through agency: Massachusetts Department of Elementary and Secondary Education Program: COVID-19 Education Stabilization Fund ALN #: 84.425D Award number: 115 511413 2022 0035 Award year: July 30, 2021 to September 30, 2023 Finding: Internal Control and Compliance over Payroll Costs Prior Year Finding: No Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass 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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, as well as weekly time and effort reporting worksheets. The timesheets are then reviewed by each employee?s supervisor and the worksheets are reviewed by the Department Head or designee, ensuring appropriates salary and wage distribution. However, for our sample of 40 payroll transactions charged to the program, 12 transactions were not supported by a completed timesheet. Cause This appears to be due to an insufficient system for collecting, filing and maintaining supporting documentation for payroll transactions charged to Federal programs. Effect BPS is not in compliance with 2 CFR 200.430(i)(1) regarding documentation in support of salaries and wages charge to the federal program. The number of transactions that were not supported by a time sheet represent 30% of the selected population and indicate a systemic problem. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Questioned costs of $41,281, for unsupported payroll charges, were charged to ALN # 84.425, Award No. 115 511413 2022 0035. Recommendation We recommend that BPS implement control procedures to ensure that all payroll costs charged to the federal program are supported by documentation as required by 2 CFR 200.430(i)(1). View of Responsible Officials from the Auditee The District will revert back to the previously approved Google Form process for daily sign in and sign out procedures. This form is authenticated through IT and managed in a centralized repository making it easier to recall data for auditing and validate for weekly time reporting. The District created a new office of Compliance and Risk Management. The office will audit and review the established process quarterly to ensure integrity of the process.
Finding number: 2022 006 Federal agency: U.S. Department of Health and Human Services Pass through agency: Massachusetts Executive Office of Elderly Affairs Program: Aging Cluster ALN #: 93.044, 93.045, 93.053 Award number: Various Award year: Various Finding: Internal Control over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Significant Deficiency Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: ? The subrecipient?s prior experience with the same or similar subawards; ? The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; ? Whether the subrecipient has new personnel or new or substantially changed systems; and ? The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of subrecipient monitoring for a sample of 8 out of the population of 20 subrecipients, the City of Boston?s Age Strong Commission (Age Strong Commission) was unable to provide documentation for one of the 8 subrecipients showing that a formal risk evaluation had been performed. In addition, the Age Strong Commission?s internal controls did not include formal risk evaluation procedures. Cause This appears to be due to inadequate policies and procedures surrounding the initial risk assessment of the subrecipients. Effect The Age Strong Commission does not have adequate controls over evaluating each subrecipient?s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None Recommendation We recommend that the Age Strong Commission implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance to ensure appropriate subrecipient monitoring. View of Responsible Officials from the Auditee A risk assessment questionnaire will be completed prior to funding being awarded to a sub recipient. The City of Boston?s Age Strong Commission?s policies and procedures will be updated to reflect this.
Finding number: 2022 006 Federal agency: U.S. Department of Health and Human Services Pass through agency: Massachusetts Executive Office of Elderly Affairs Program: Aging Cluster ALN #: 93.044, 93.045, 93.053 Award number: Various Award year: Various Finding: Internal Control over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Significant Deficiency Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: ? The subrecipient?s prior experience with the same or similar subawards; ? The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; ? Whether the subrecipient has new personnel or new or substantially changed systems; and ? The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of subrecipient monitoring for a sample of 8 out of the population of 20 subrecipients, the City of Boston?s Age Strong Commission (Age Strong Commission) was unable to provide documentation for one of the 8 subrecipients showing that a formal risk evaluation had been performed. In addition, the Age Strong Commission?s internal controls did not include formal risk evaluation procedures. Cause This appears to be due to inadequate policies and procedures surrounding the initial risk assessment of the subrecipients. Effect The Age Strong Commission does not have adequate controls over evaluating each subrecipient?s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None Recommendation We recommend that the Age Strong Commission implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance to ensure appropriate subrecipient monitoring. View of Responsible Officials from the Auditee A risk assessment questionnaire will be completed prior to funding being awarded to a sub recipient. The City of Boston?s Age Strong Commission?s policies and procedures will be updated to reflect this.
Finding number: 2022 006 Federal agency: U.S. Department of Health and Human Services Pass through agency: Massachusetts Executive Office of Elderly Affairs Program: Aging Cluster ALN #: 93.044, 93.045, 93.053 Award number: Various Award year: Various Finding: Internal Control over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Significant Deficiency Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: ? The subrecipient?s prior experience with the same or similar subawards; ? The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; ? Whether the subrecipient has new personnel or new or substantially changed systems; and ? The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of subrecipient monitoring for a sample of 8 out of the population of 20 subrecipients, the City of Boston?s Age Strong Commission (Age Strong Commission) was unable to provide documentation for one of the 8 subrecipients showing that a formal risk evaluation had been performed. In addition, the Age Strong Commission?s internal controls did not include formal risk evaluation procedures. Cause This appears to be due to inadequate policies and procedures surrounding the initial risk assessment of the subrecipients. Effect The Age Strong Commission does not have adequate controls over evaluating each subrecipient?s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None Recommendation We recommend that the Age Strong Commission implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance to ensure appropriate subrecipient monitoring. View of Responsible Officials from the Auditee A risk assessment questionnaire will be completed prior to funding being awarded to a sub recipient. The City of Boston?s Age Strong Commission?s policies and procedures will be updated to reflect this.
Finding number: 2022 006 Federal agency: U.S. Department of Health and Human Services Pass through agency: Massachusetts Executive Office of Elderly Affairs Program: Aging Cluster ALN #: 93.044, 93.045, 93.053 Award number: Various Award year: Various Finding: Internal Control over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Significant Deficiency Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: ? The subrecipient?s prior experience with the same or similar subawards; ? The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; ? Whether the subrecipient has new personnel or new or substantially changed systems; and ? The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of subrecipient monitoring for a sample of 8 out of the population of 20 subrecipients, the City of Boston?s Age Strong Commission (Age Strong Commission) was unable to provide documentation for one of the 8 subrecipients showing that a formal risk evaluation had been performed. In addition, the Age Strong Commission?s internal controls did not include formal risk evaluation procedures. Cause This appears to be due to inadequate policies and procedures surrounding the initial risk assessment of the subrecipients. Effect The Age Strong Commission does not have adequate controls over evaluating each subrecipient?s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None Recommendation We recommend that the Age Strong Commission implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance to ensure appropriate subrecipient monitoring. View of Responsible Officials from the Auditee A risk assessment questionnaire will be completed prior to funding being awarded to a sub recipient. The City of Boston?s Age Strong Commission?s policies and procedures will be updated to reflect this.
Finding number: 2022 006 Federal agency: U.S. Department of Health and Human Services Pass through agency: Massachusetts Executive Office of Elderly Affairs Program: Aging Cluster ALN #: 93.044, 93.045, 93.053 Award number: Various Award year: Various Finding: Internal Control over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Significant Deficiency Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: ? The subrecipient?s prior experience with the same or similar subawards; ? The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; ? Whether the subrecipient has new personnel or new or substantially changed systems; and ? The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of subrecipient monitoring for a sample of 8 out of the population of 20 subrecipients, the City of Boston?s Age Strong Commission (Age Strong Commission) was unable to provide documentation for one of the 8 subrecipients showing that a formal risk evaluation had been performed. In addition, the Age Strong Commission?s internal controls did not include formal risk evaluation procedures. Cause This appears to be due to inadequate policies and procedures surrounding the initial risk assessment of the subrecipients. Effect The Age Strong Commission does not have adequate controls over evaluating each subrecipient?s risk of noncompliance for purposes of determining appropriate subrecipient monitoring. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs None Recommendation We recommend that the Age Strong Commission implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance to ensure appropriate subrecipient monitoring. View of Responsible Officials from the Auditee A risk assessment questionnaire will be completed prior to funding being awarded to a sub recipient. The City of Boston?s Age Strong Commission?s policies and procedures will be updated to reflect this.
Finding number: 2022 007 Federal agency: U.S. Department of Homeland Security Pass through agency: Massachusetts Executive Office of Public Safety & Security Program: Homeland Security Grant Program ALN #: 97.067 Award number: Boston FFY 19 UASI, Boston FFY 20 UASI, Boston FFY 21 UASI, Boston FFY 22 UASI, Award year: Various Finding: Internal Control over Subrecipient Monitoring Prior Year Finding: No Type of Finding: Significant Deficiency Criteria According to 2 CFR 200.331 (b), a pass through entity must evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring, which may include consideration of such factors as: ? The subrecipient?s prior experience with the same or similar subawards; ? The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; ? Whether the subrecipient has new personnel or new or substantially changed systems; and ? The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Also, according to 2 CFR 200.331 (d), a pass through entity must: ? Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. ? Follow up and ensure that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass through entity detected through audits, on site reviews, and other means. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Based on our testwork, it was noted that the Mayor?s Office of Office of Emergency Management (OEM) did not perform a formal evaluation of each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring to be performed. Further, our review of program monitoring documentation for our sample of 4 of the population of 11 subrecipients indicated that, although OEM performed subrecipient monitoring in fiscal year 2022, OEM did not follow up with 2 out of 4 subrecipients as to why the amount of total program expenditures on the subrecipients? fiscal year 2021 Schedule of Expenditures of Federal Awards (SEFA) were different than total program expenditures reported to them by OEM. Cause This appears to be due to inadequate policies and procedures surrounding both the initial risk assessment of the subrecipients, as well as follow up with subrecipients when differences are noted between funding amounts reported to the subrecipient by OEM and amounts reported of the subrecipient?s SEFA. Effect OEM does not have adequate controls over evaluating each subrecipient?s risk of noncompliance for purposes of determining appropriate subrecipient monitoring, and ensuring that the total amount of expenditures reported on the subrecipient?s SEFA is consistent with grant funding provided by OEM to the subrecipient. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that OEM implement control procedures to ensure that each subrecipient is evaluated for risk of noncompliance for determining appropriate subrecipient monitoring, and to ensure that the total amount of expenditures reported on the subrecipient?s SEFA is consistent with grant funding provided by OEM to the subrecipient. View of Responsible Officials from the Auditee OEM will add an event to the departmental annual calendar on the first business day of the month of May of every year indicating that pre risk assessment forms for the upcoming fiscal year beginning on July 1st are to be sent out to subrecipients of federal funds. The addition of this even to the calendar will ensure that all appropriate Admin and Finance staff at OEM are aware of this annual requirement and follow up with subrecipients to receive completed pre risk assessments in advance of the new fiscal year. OEM?s Director of Admin and Finance will be the primary point of contact for pre risk assessment related inquiries from subrecipients, with the Assistant Deputy Chief of Administration serving as a backup point of contact. An event will also be added on the final business day of May each year to ensure that OEM staff follow up with subrecipients that were not responsive to the initial request. OEM will also institute a policy of requiring a written response following receipt of a SEFA letter from OEM detailing the previous fiscal year?s expenditures on behalf of a subrecipient. This written response will contain confirmation that the subrecipients have recorded the same expenditures in their accounting systems as OEM reported in the SEFA letter. Should there be any discrepancy between the information provided in the SEFA from OEM and the expenditures reported by the subrecipient, OEM will schedule a meeting to reconcile any differences and resolve discrepancies within 30 days of being notified of said discrepancies. The Director of Admin and Finance and the Assistant Deputy Chief of Administration will represent OEM in this meeting with the appropriate staff from the subrecipient reporting a discrepancy. Confirmation of resolution of any discrepancies will be documented in writing and attached to SEFA letters for record keeping purposes.
2022 ? 003 ? Higher Education Emergency Relief Fund (HEERF) ? Reporting Federal Agency: Department of Education Federal Program Title: Higher Education Emergency Relief Fund Assistance Listing Numbers: 84.425E and 84.425F Award Period: July 1, 2021 through June 30, 2022 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or Specific Requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal awards. Additionally, the College was required to submit certain reports relating to their Higher Education Emergency Relief Fund (HEERF) during fiscal year 2022. Condition: During our testing of reporting, it was noted that the Student Accounts and Loan Coordinator prepares the reports but no one reviews the reports before submission. Additionally, a few discrepancies were noted as it relates to numbers reported and their underlying support. Also, the institutional and student?s quarterly reports were presented cumulatively so individual quarters were not available for testing. Questioned Costs: None Context: The College had inconsistencies between the annual report, institutional and the student reports submitted, and the support provided. Additionally, the reports were not reviewed after they were prepared. Cause: The HEERF funding is new to the College and given the complexity, the Student Accounts and Loan Coordinator was the only knowledgeable person to prepare these reports. Effect: A few reports submitted had discrepancies. Repeat Finding: Yes ? 2021-002 Recommendation: We recommend that the College review their policies surrounding federal grants and ensure a review process is in place to ensure that all necessary compliance requirements are met. Views of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Higher Education Emergency Relief Fund (HEERF) ? Reporting Federal Agency: Department of Education Federal Program Title: Higher Education Emergency Relief Fund Assistance Listing Numbers: 84.425E and 84.425F Award Period: July 1, 2021 through June 30, 2022 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or Specific Requirement: The 2 CFR Section 200.303 require that nonfederal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with Federal Statutes, regulations, and the terms and conditions of the Federal awards. Additionally, the College was required to submit certain reports relating to their Higher Education Emergency Relief Fund (HEERF) during fiscal year 2022. Condition: During our testing of reporting, it was noted that the Student Accounts and Loan Coordinator prepares the reports but no one reviews the reports before submission. Additionally, a few discrepancies were noted as it relates to numbers reported and their underlying support. Also, the institutional and student?s quarterly reports were presented cumulatively so individual quarters were not available for testing. Questioned Costs: None Context: The College had inconsistencies between the annual report, institutional and the student reports submitted, and the support provided. Additionally, the reports were not reviewed after they were prepared. Cause: The HEERF funding is new to the College and given the complexity, the Student Accounts and Loan Coordinator was the only knowledgeable person to prepare these reports. Effect: A few reports submitted had discrepancies. Repeat Finding: Yes ? 2021-002 Recommendation: We recommend that the College review their policies surrounding federal grants and ensure a review process is in place to ensure that all necessary compliance requirements are met. Views of Responsible Officials: There is no disagreement with the audit finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) 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). Condition: The Agency of Education (Agency) was not in compliance with FSRS reporting requirements. Subawards and subaward modifications were not reported accurately and/or timely to FSRS. Context: 40 subawards were selected for testing and many of these subawards were amended several times for a total of 370 transactions tested. Specifically, the following exceptions were noted: ? 6 of 40 original subawards were not reported to FSRS. ? 50 of 330 amendments were not reported to FSRS. ? 10 of 40 original subawards were not reported timely to FSRS. ? 35 of 330 subaward amendments were not reported timely to FSRS. ? 1 of 40 subawards reported an incorrect original subaward amount to FSRS. ? 85 of 330 subaward amendments reported an incorrect amount to FSRS. When reporting the amendments, the Agency frequently reported the cumulative subaward amount rather than only the current amendment amount which overstated the total amount reported for these subawards. Cause: The Agency?s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely and accurately to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported timely or accurately to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Special Tests and Provisions ? Accountability for USDA-Donated Foods Type of Finding Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Distributing and sub distributing agencies (as defined at 7 CFR section 250.3) must maintain accurate and complete records with respect to the receipt, distribution, and inventory of USDA-donated foods, including end products processed from donated foods. Failure to maintain records required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or loss of donated foods, and the agency, processor, or entity may be required to pay USDA the value of the food or replace it in kind (7 CFR sections 250.16(a)(6) and 250.15(c)). Distributing and sub distributing agencies shall take a physical inventory of all storage facilities. Such inventory shall be reconciled annually with the storage facility?s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. Corrective action shall be taken immediately on all deficiencies and inventory discrepancies and the results of the corrective action forwarded to the distributing agency (7 CFR section 250.14(e)). 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 Agency of Education (Agency) acts as the State distributing agency for the USDA donated foods. Commodities received by the Agency are ultimately distributed to participating School Food Authorities (SFA) throughout the State of Vermont. Errors were detected in the Agency?s reconciliation process for USDA-Donated Foods. Context: On an annual basis, the Agency enters into a $0 contract with a third-party vendor to warehouse the brown box USDA foods once they are delivered to the State. The third-party vendor utilizes an inventory system, TRACS, to maintain inventory of the commodities in the warehouse and to track the distribution of donated foods to the SFAs. While the quantity of items is maintained in TRACS, the system does not track the value of the commodity items. The value of commodities and the number of commodity items are tracked through the USDA?s Web Based Supply Chain Management (WBSCM) system. Annually, the Agency notifies each SFA of the value of their commodities received. On a quarterly basis, the Agency reconciles commodities recorded in TRACS and WBSCM. Nine school reconciliations, including 58 products, were selected for testing. The following exceptions were noted: ? 31 of 58 products contained variances, but no follow-up on these variances was documented by the Agency. ? 2 of 9 school reconciliations contained an incorrect TRACS amount. ? For 9 of 9 school reconciliations, support could not be provided to demonstrate that the reconciliations performed were complete and accurate. Cause: The Agency?s procedures were not sufficient to ensure that reconciliations of the WBSCM and TRACS systems was performed accurately. Internal controls did not detect or prevent the errors. Effect: The Agency may not be accurately reporting the value of commodities received to the SFAs. In addition, variances may exist between TRACS and WBSCM that may not be identified and counted in a timely manner. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding quarterly WBSCM to TRACS reconciliations to ensure that the reconciliations are complete and accurate. We further recommend that variances identified during the reconciliation process are investigated and corrected timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Reporting ? Financial Reporting Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Each month?s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final Claim for Reimbursement for the fiscal 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 Agency of Education (Agency) did not retain all supporting documentation for several summary lines of the monthly FNS-10 reports and auditors were unable to verify that the reported amounts were accurate for these rows. Context: Seven reports were filed for the three months which were selected for testing, consisting of 3 FNS-10 reports, 3 FNS-10 SSO reports and 1 FNS-418 report. For 2 of the 3 FNS-10 and FNS-10 SSO reports reviewed, detail supporting documentation provided to auditors for several summary rows did not agree to the amounts reported. Specifically, we noted the following: ? FNS-10 SSO ? August 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 4 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 SSO ? November 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 2 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. The Agency acknowledged that it had not retained detail reconciliations at the time of submission, and it provided revised reconciliations to auditors. Upon review, it was determined that several lines of the revised reconciliations did not agree to the submitted reports, therefore, auditors were unable to verify the accuracy of the reports filed for the reports. Cause: The Agency?s procedures were not sufficient to ensure that it retained all required supporting documentation for FNS-10 and FNS-10 SSO reports filed during FY 2022; including retaining copies of reconciliations performed between detail and summary data. Internal controls did not detect or prevent the errors. Effect: Auditors were unable to verify the accuracy of portions of the FNS-10 and FNS-10 SSO reports filed. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding monthly financial reporting to ensure that all supporting documentation is retained and available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) 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). Condition: The Agency of Education (Agency) was not in compliance with FSRS reporting requirements. Subawards and subaward modifications were not reported accurately and/or timely to FSRS. Context: 40 subawards were selected for testing and many of these subawards were amended several times for a total of 370 transactions tested. Specifically, the following exceptions were noted: ? 6 of 40 original subawards were not reported to FSRS. ? 50 of 330 amendments were not reported to FSRS. ? 10 of 40 original subawards were not reported timely to FSRS. ? 35 of 330 subaward amendments were not reported timely to FSRS. ? 1 of 40 subawards reported an incorrect original subaward amount to FSRS. ? 85 of 330 subaward amendments reported an incorrect amount to FSRS. When reporting the amendments, the Agency frequently reported the cumulative subaward amount rather than only the current amendment amount which overstated the total amount reported for these subawards. Cause: The Agency?s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely and accurately to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported timely or accurately to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Special Tests and Provisions ? Accountability for USDA-Donated Foods Type of Finding Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Distributing and sub distributing agencies (as defined at 7 CFR section 250.3) must maintain accurate and complete records with respect to the receipt, distribution, and inventory of USDA-donated foods, including end products processed from donated foods. Failure to maintain records required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or loss of donated foods, and the agency, processor, or entity may be required to pay USDA the value of the food or replace it in kind (7 CFR sections 250.16(a)(6) and 250.15(c)). Distributing and sub distributing agencies shall take a physical inventory of all storage facilities. Such inventory shall be reconciled annually with the storage facility?s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. Corrective action shall be taken immediately on all deficiencies and inventory discrepancies and the results of the corrective action forwarded to the distributing agency (7 CFR section 250.14(e)). 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 Agency of Education (Agency) acts as the State distributing agency for the USDA donated foods. Commodities received by the Agency are ultimately distributed to participating School Food Authorities (SFA) throughout the State of Vermont. Errors were detected in the Agency?s reconciliation process for USDA-Donated Foods. Context: On an annual basis, the Agency enters into a $0 contract with a third-party vendor to warehouse the brown box USDA foods once they are delivered to the State. The third-party vendor utilizes an inventory system, TRACS, to maintain inventory of the commodities in the warehouse and to track the distribution of donated foods to the SFAs. While the quantity of items is maintained in TRACS, the system does not track the value of the commodity items. The value of commodities and the number of commodity items are tracked through the USDA?s Web Based Supply Chain Management (WBSCM) system. Annually, the Agency notifies each SFA of the value of their commodities received. On a quarterly basis, the Agency reconciles commodities recorded in TRACS and WBSCM. Nine school reconciliations, including 58 products, were selected for testing. The following exceptions were noted: ? 31 of 58 products contained variances, but no follow-up on these variances was documented by the Agency. ? 2 of 9 school reconciliations contained an incorrect TRACS amount. ? For 9 of 9 school reconciliations, support could not be provided to demonstrate that the reconciliations performed were complete and accurate. Cause: The Agency?s procedures were not sufficient to ensure that reconciliations of the WBSCM and TRACS systems was performed accurately. Internal controls did not detect or prevent the errors. Effect: The Agency may not be accurately reporting the value of commodities received to the SFAs. In addition, variances may exist between TRACS and WBSCM that may not be identified and counted in a timely manner. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding quarterly WBSCM to TRACS reconciliations to ensure that the reconciliations are complete and accurate. We further recommend that variances identified during the reconciliation process are investigated and corrected timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Reporting ? Financial Reporting Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Each month?s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final Claim for Reimbursement for the fiscal 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 Agency of Education (Agency) did not retain all supporting documentation for several summary lines of the monthly FNS-10 reports and auditors were unable to verify that the reported amounts were accurate for these rows. Context: Seven reports were filed for the three months which were selected for testing, consisting of 3 FNS-10 reports, 3 FNS-10 SSO reports and 1 FNS-418 report. For 2 of the 3 FNS-10 and FNS-10 SSO reports reviewed, detail supporting documentation provided to auditors for several summary rows did not agree to the amounts reported. Specifically, we noted the following: ? FNS-10 SSO ? August 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 4 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 SSO ? November 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 2 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. The Agency acknowledged that it had not retained detail reconciliations at the time of submission, and it provided revised reconciliations to auditors. Upon review, it was determined that several lines of the revised reconciliations did not agree to the submitted reports, therefore, auditors were unable to verify the accuracy of the reports filed for the reports. Cause: The Agency?s procedures were not sufficient to ensure that it retained all required supporting documentation for FNS-10 and FNS-10 SSO reports filed during FY 2022; including retaining copies of reconciliations performed between detail and summary data. Internal controls did not detect or prevent the errors. Effect: Auditors were unable to verify the accuracy of portions of the FNS-10 and FNS-10 SSO reports filed. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding monthly financial reporting to ensure that all supporting documentation is retained and available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) 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). Condition: The Agency of Education (Agency) was not in compliance with FSRS reporting requirements. Subawards and subaward modifications were not reported accurately and/or timely to FSRS. Context: 40 subawards were selected for testing and many of these subawards were amended several times for a total of 370 transactions tested. Specifically, the following exceptions were noted: ? 6 of 40 original subawards were not reported to FSRS. ? 50 of 330 amendments were not reported to FSRS. ? 10 of 40 original subawards were not reported timely to FSRS. ? 35 of 330 subaward amendments were not reported timely to FSRS. ? 1 of 40 subawards reported an incorrect original subaward amount to FSRS. ? 85 of 330 subaward amendments reported an incorrect amount to FSRS. When reporting the amendments, the Agency frequently reported the cumulative subaward amount rather than only the current amendment amount which overstated the total amount reported for these subawards. Cause: The Agency?s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely and accurately to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported timely or accurately to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Special Tests and Provisions ? Accountability for USDA-Donated Foods Type of Finding Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Distributing and sub distributing agencies (as defined at 7 CFR section 250.3) must maintain accurate and complete records with respect to the receipt, distribution, and inventory of USDA-donated foods, including end products processed from donated foods. Failure to maintain records required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or loss of donated foods, and the agency, processor, or entity may be required to pay USDA the value of the food or replace it in kind (7 CFR sections 250.16(a)(6) and 250.15(c)). Distributing and sub distributing agencies shall take a physical inventory of all storage facilities. Such inventory shall be reconciled annually with the storage facility?s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. Corrective action shall be taken immediately on all deficiencies and inventory discrepancies and the results of the corrective action forwarded to the distributing agency (7 CFR section 250.14(e)). 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 Agency of Education (Agency) acts as the State distributing agency for the USDA donated foods. Commodities received by the Agency are ultimately distributed to participating School Food Authorities (SFA) throughout the State of Vermont. Errors were detected in the Agency?s reconciliation process for USDA-Donated Foods. Context: On an annual basis, the Agency enters into a $0 contract with a third-party vendor to warehouse the brown box USDA foods once they are delivered to the State. The third-party vendor utilizes an inventory system, TRACS, to maintain inventory of the commodities in the warehouse and to track the distribution of donated foods to the SFAs. While the quantity of items is maintained in TRACS, the system does not track the value of the commodity items. The value of commodities and the number of commodity items are tracked through the USDA?s Web Based Supply Chain Management (WBSCM) system. Annually, the Agency notifies each SFA of the value of their commodities received. On a quarterly basis, the Agency reconciles commodities recorded in TRACS and WBSCM. Nine school reconciliations, including 58 products, were selected for testing. The following exceptions were noted: ? 31 of 58 products contained variances, but no follow-up on these variances was documented by the Agency. ? 2 of 9 school reconciliations contained an incorrect TRACS amount. ? For 9 of 9 school reconciliations, support could not be provided to demonstrate that the reconciliations performed were complete and accurate. Cause: The Agency?s procedures were not sufficient to ensure that reconciliations of the WBSCM and TRACS systems was performed accurately. Internal controls did not detect or prevent the errors. Effect: The Agency may not be accurately reporting the value of commodities received to the SFAs. In addition, variances may exist between TRACS and WBSCM that may not be identified and counted in a timely manner. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding quarterly WBSCM to TRACS reconciliations to ensure that the reconciliations are complete and accurate. We further recommend that variances identified during the reconciliation process are investigated and corrected timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Reporting ? Financial Reporting Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Each month?s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final Claim for Reimbursement for the fiscal 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 Agency of Education (Agency) did not retain all supporting documentation for several summary lines of the monthly FNS-10 reports and auditors were unable to verify that the reported amounts were accurate for these rows. Context: Seven reports were filed for the three months which were selected for testing, consisting of 3 FNS-10 reports, 3 FNS-10 SSO reports and 1 FNS-418 report. For 2 of the 3 FNS-10 and FNS-10 SSO reports reviewed, detail supporting documentation provided to auditors for several summary rows did not agree to the amounts reported. Specifically, we noted the following: ? FNS-10 SSO ? August 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 4 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 SSO ? November 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 2 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. The Agency acknowledged that it had not retained detail reconciliations at the time of submission, and it provided revised reconciliations to auditors. Upon review, it was determined that several lines of the revised reconciliations did not agree to the submitted reports, therefore, auditors were unable to verify the accuracy of the reports filed for the reports. Cause: The Agency?s procedures were not sufficient to ensure that it retained all required supporting documentation for FNS-10 and FNS-10 SSO reports filed during FY 2022; including retaining copies of reconciliations performed between detail and summary data. Internal controls did not detect or prevent the errors. Effect: Auditors were unable to verify the accuracy of portions of the FNS-10 and FNS-10 SSO reports filed. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding monthly financial reporting to ensure that all supporting documentation is retained and available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) 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). Condition: The Agency of Education (Agency) was not in compliance with FSRS reporting requirements. Subawards and subaward modifications were not reported accurately and/or timely to FSRS. Context: 40 subawards were selected for testing and many of these subawards were amended several times for a total of 370 transactions tested. Specifically, the following exceptions were noted: ? 6 of 40 original subawards were not reported to FSRS. ? 50 of 330 amendments were not reported to FSRS. ? 10 of 40 original subawards were not reported timely to FSRS. ? 35 of 330 subaward amendments were not reported timely to FSRS. ? 1 of 40 subawards reported an incorrect original subaward amount to FSRS. ? 85 of 330 subaward amendments reported an incorrect amount to FSRS. When reporting the amendments, the Agency frequently reported the cumulative subaward amount rather than only the current amendment amount which overstated the total amount reported for these subawards. Cause: The Agency?s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely and accurately to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported timely or accurately to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Special Tests and Provisions ? Accountability for USDA-Donated Foods Type of Finding Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Distributing and sub distributing agencies (as defined at 7 CFR section 250.3) must maintain accurate and complete records with respect to the receipt, distribution, and inventory of USDA-donated foods, including end products processed from donated foods. Failure to maintain records required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or loss of donated foods, and the agency, processor, or entity may be required to pay USDA the value of the food or replace it in kind (7 CFR sections 250.16(a)(6) and 250.15(c)). Distributing and sub distributing agencies shall take a physical inventory of all storage facilities. Such inventory shall be reconciled annually with the storage facility?s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. Corrective action shall be taken immediately on all deficiencies and inventory discrepancies and the results of the corrective action forwarded to the distributing agency (7 CFR section 250.14(e)). 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 Agency of Education (Agency) acts as the State distributing agency for the USDA donated foods. Commodities received by the Agency are ultimately distributed to participating School Food Authorities (SFA) throughout the State of Vermont. Errors were detected in the Agency?s reconciliation process for USDA-Donated Foods. Context: On an annual basis, the Agency enters into a $0 contract with a third-party vendor to warehouse the brown box USDA foods once they are delivered to the State. The third-party vendor utilizes an inventory system, TRACS, to maintain inventory of the commodities in the warehouse and to track the distribution of donated foods to the SFAs. While the quantity of items is maintained in TRACS, the system does not track the value of the commodity items. The value of commodities and the number of commodity items are tracked through the USDA?s Web Based Supply Chain Management (WBSCM) system. Annually, the Agency notifies each SFA of the value of their commodities received. On a quarterly basis, the Agency reconciles commodities recorded in TRACS and WBSCM. Nine school reconciliations, including 58 products, were selected for testing. The following exceptions were noted: ? 31 of 58 products contained variances, but no follow-up on these variances was documented by the Agency. ? 2 of 9 school reconciliations contained an incorrect TRACS amount. ? For 9 of 9 school reconciliations, support could not be provided to demonstrate that the reconciliations performed were complete and accurate. Cause: The Agency?s procedures were not sufficient to ensure that reconciliations of the WBSCM and TRACS systems was performed accurately. Internal controls did not detect or prevent the errors. Effect: The Agency may not be accurately reporting the value of commodities received to the SFAs. In addition, variances may exist between TRACS and WBSCM that may not be identified and counted in a timely manner. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding quarterly WBSCM to TRACS reconciliations to ensure that the reconciliations are complete and accurate. We further recommend that variances identified during the reconciliation process are investigated and corrected timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Reporting ? Financial Reporting Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Each month?s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final Claim for Reimbursement for the fiscal 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 Agency of Education (Agency) did not retain all supporting documentation for several summary lines of the monthly FNS-10 reports and auditors were unable to verify that the reported amounts were accurate for these rows. Context: Seven reports were filed for the three months which were selected for testing, consisting of 3 FNS-10 reports, 3 FNS-10 SSO reports and 1 FNS-418 report. For 2 of the 3 FNS-10 and FNS-10 SSO reports reviewed, detail supporting documentation provided to auditors for several summary rows did not agree to the amounts reported. Specifically, we noted the following: ? FNS-10 SSO ? August 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 4 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 SSO ? November 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 2 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. The Agency acknowledged that it had not retained detail reconciliations at the time of submission, and it provided revised reconciliations to auditors. Upon review, it was determined that several lines of the revised reconciliations did not agree to the submitted reports, therefore, auditors were unable to verify the accuracy of the reports filed for the reports. Cause: The Agency?s procedures were not sufficient to ensure that it retained all required supporting documentation for FNS-10 and FNS-10 SSO reports filed during FY 2022; including retaining copies of reconciliations performed between detail and summary data. Internal controls did not detect or prevent the errors. Effect: Auditors were unable to verify the accuracy of portions of the FNS-10 and FNS-10 SSO reports filed. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding monthly financial reporting to ensure that all supporting documentation is retained and available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-006 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) 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). Condition: The Agency of Education (Agency) was not in compliance with FSRS reporting requirements. Subawards and subaward modifications were not reported accurately and/or timely to FSRS. Context: 40 subawards were selected for testing and many of these subawards were amended several times for a total of 370 transactions tested. Specifically, the following exceptions were noted: ? 6 of 40 original subawards were not reported to FSRS. ? 50 of 330 amendments were not reported to FSRS. ? 10 of 40 original subawards were not reported timely to FSRS. ? 35 of 330 subaward amendments were not reported timely to FSRS. ? 1 of 40 subawards reported an incorrect original subaward amount to FSRS. ? 85 of 330 subaward amendments reported an incorrect amount to FSRS. When reporting the amendments, the Agency frequently reported the cumulative subaward amount rather than only the current amendment amount which overstated the total amount reported for these subawards. Cause: The Agency?s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely and accurately to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported timely or accurately to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-007 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Special Tests and Provisions ? Accountability for USDA-Donated Foods Type of Finding Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Distributing and sub distributing agencies (as defined at 7 CFR section 250.3) must maintain accurate and complete records with respect to the receipt, distribution, and inventory of USDA-donated foods, including end products processed from donated foods. Failure to maintain records required by 7 CFR section 250.16 shall be considered prima facie evidence of improper distribution or loss of donated foods, and the agency, processor, or entity may be required to pay USDA the value of the food or replace it in kind (7 CFR sections 250.16(a)(6) and 250.15(c)). Distributing and sub distributing agencies shall take a physical inventory of all storage facilities. Such inventory shall be reconciled annually with the storage facility?s inventory records and maintained on file by the agency that contracted with or maintained the storage facility. Corrective action shall be taken immediately on all deficiencies and inventory discrepancies and the results of the corrective action forwarded to the distributing agency (7 CFR section 250.14(e)). 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 Agency of Education (Agency) acts as the State distributing agency for the USDA donated foods. Commodities received by the Agency are ultimately distributed to participating School Food Authorities (SFA) throughout the State of Vermont. Errors were detected in the Agency?s reconciliation process for USDA-Donated Foods. Context: On an annual basis, the Agency enters into a $0 contract with a third-party vendor to warehouse the brown box USDA foods once they are delivered to the State. The third-party vendor utilizes an inventory system, TRACS, to maintain inventory of the commodities in the warehouse and to track the distribution of donated foods to the SFAs. While the quantity of items is maintained in TRACS, the system does not track the value of the commodity items. The value of commodities and the number of commodity items are tracked through the USDA?s Web Based Supply Chain Management (WBSCM) system. Annually, the Agency notifies each SFA of the value of their commodities received. On a quarterly basis, the Agency reconciles commodities recorded in TRACS and WBSCM. Nine school reconciliations, including 58 products, were selected for testing. The following exceptions were noted: ? 31 of 58 products contained variances, but no follow-up on these variances was documented by the Agency. ? 2 of 9 school reconciliations contained an incorrect TRACS amount. ? For 9 of 9 school reconciliations, support could not be provided to demonstrate that the reconciliations performed were complete and accurate. Cause: The Agency?s procedures were not sufficient to ensure that reconciliations of the WBSCM and TRACS systems was performed accurately. Internal controls did not detect or prevent the errors. Effect: The Agency may not be accurately reporting the value of commodities received to the SFAs. In addition, variances may exist between TRACS and WBSCM that may not be identified and counted in a timely manner. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding quarterly WBSCM to TRACS reconciliations to ensure that the reconciliations are complete and accurate. We further recommend that variances identified during the reconciliation process are investigated and corrected timely. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-008 Prior Year Finding: No Federal Agency: U.S. Department of Agriculture State Agency: Agency of Education (Agency) Federal Program: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Award Number and Year: 4VT300307 (2020-2022), 4VT310307 (2020-2022), 4VT308907 (2022-2023) Compliance Requirement: Reporting ? Financial Reporting Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: School Food Authorities (SFAs) and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The state agency has an additional 30 days to submit a consolidated report to FNS (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Each month?s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final Claim for Reimbursement for the fiscal 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 Agency of Education (Agency) did not retain all supporting documentation for several summary lines of the monthly FNS-10 reports and auditors were unable to verify that the reported amounts were accurate for these rows. Context: Seven reports were filed for the three months which were selected for testing, consisting of 3 FNS-10 reports, 3 FNS-10 SSO reports and 1 FNS-418 report. For 2 of the 3 FNS-10 and FNS-10 SSO reports reviewed, detail supporting documentation provided to auditors for several summary rows did not agree to the amounts reported. Specifically, we noted the following: ? FNS-10 SSO ? August 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 4 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 SSO ? November 2021: For 2 of 3 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. ? FNS-10 ? November 2021: For 2 of 8 categories, detail reconciliations provided to auditors did not agree to the summary rows reported. The Agency acknowledged that it had not retained detail reconciliations at the time of submission, and it provided revised reconciliations to auditors. Upon review, it was determined that several lines of the revised reconciliations did not agree to the submitted reports, therefore, auditors were unable to verify the accuracy of the reports filed for the reports. Cause: The Agency?s procedures were not sufficient to ensure that it retained all required supporting documentation for FNS-10 and FNS-10 SSO reports filed during FY 2022; including retaining copies of reconciliations performed between detail and summary data. Internal controls did not detect or prevent the errors. Effect: Auditors were unable to verify the accuracy of portions of the FNS-10 and FNS-10 SSO reports filed. Questioned costs: Undetermined. Recommendation: We recommend the Agency review and enhance its procedures and internal controls regarding monthly financial reporting to ensure that all supporting documentation is retained and available for audit. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-009 Prior Year Finding: No Federal Agency: Department of Defense State Agency: Military Department Federal Program: Military Construction, National Guard Assistance Listing Number: 12.400 Award Number and Year: W912LN-20-2-2102 (FY2020) W912LN-21-2-2101 (FY2021) Compliance Requirement: Reporting Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The National Guard Bureau (NGB) Cooperative Agreement program operates on the basis that the grantee expends State government funds first and then submits request (vouchers) for reimbursement from NGB for allowable Cooperative Agreement (CA) costs. All approved CA agreement payments (to include Advances) made to the grantee by NGB are reimbursable payments. To process reimbursement payments the grantee shall provide an OMB Standard Form (SF) 271 - Outlay Report and Request for Reimbursement for Construction Programs with supporting documentation to the CA Program Manager. The supporting documentation will itemize the amount of funds expended and the corresponding grantee accounting classification to be reimbursed. 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: Numerous reporting errors were noted on SF-271 reimbursement reports submitted by the Military Department (Department) for the Warfare School and Bennington projects. The amounts reported by cost category did not match supporting documentation and it was determined that budget amounts were reported as current expenditures instead of actual costs incurred to-date. Although individual line items were reported incorrectly, the total federal share requested was calculated correctly based on actual costs incurred to-date and reimbursements did not exceed the federal share of expenditures incurred. Context: Three monthly reports were reviewed for the Warfare School and two monthly reports were reviewed for Bennington. The following exceptions were noted: Warfare School ? 9/30/2021: 5 of 9 report detail lines were reported incorrectly, using the budget amount instead of the required total costs to-date. Of the incorrectly reported lines, two were summary calculations. ? 11/30/2021: 5 of 9 report detail lines were reported incorrectly, using the budget amount instead of the required total costs to-date. Of the incorrectly reported lines, two were summary calculations. ? 3/31/2022: 4 of 9 report detail lines were reported incorrectly, using the budget amount instead of the required total costs to-date. Of the incorrectly reported lines, two were summary calculations. Bennington ? 11/30/2021: 3 of 9 report detail lines were reported incorrectly, using the budget amount instead of the required total costs to-date. Of the incorrectly reported lines, two were summary calculations. ? 3/31/2022: 3 of 9 report detail lines were reported incorrectly, using the budget amount instead of the required total costs to-date. Of the incorrectly reported lines, two were summary calculations. Questioned costs: None noted. The Federal share requested was calculated correctly based on costs incurred to-date. Cause: The Department?s procedures were not sufficient to ensure the SF-271 ? Outlay Report and Request for Reimbursement for Construction Programs reports were submitted accurately. Internal controls did not prevent or detect the errors. Effect: Reporting the budget amount instead of actual costs incurred on detail report lines results in an overstatement of project costs incurred as of the report date. Further, reporting errors could result in an incorrect calculation of the Federal share requested for reimbursement. Recommendation: We recommend the Department enhance its SF-271 policies and procedures to verify that detail line items agree with supporting documentation. The Department should also improve its internal controls to ensure that SF-271 reports have been prepared accurately prior to submission and that the Federal share of reimbursement requests are calculated correctly. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-010 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development State Agency: Agency of Commerce and Community Development Federal Program: Community Development Block Grant Assistance Listing Number: 14.228 Award Number and Year: B-20-DW-50-0001 (2020) B-20-DC-50-0001 (2020) B-21-DC-50-0001 (2021) Compliance Requirement: Subrecipient Monitoring Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR ?200.332 - Requirements for Pass-Through Entities states, in part, that all pass-through entities must: (b) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F - Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (f) Verify that every subrecipient is audited as required by Subpart F - Audit Requirements of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501 Audit requirements. 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 State of Vermont Agency of Commerce and Community Development was not able to provide support that it ensured its subrecipients were audited as required by 2 CFR Part 200 Subpart F ? Audit Requirements (Subpart F). Context: Exceptions were noted in three of eight subrecipients selected for testing: ? For three of eight subrecipients, the Agency was unable to provide support that it ensured the subrecipients were audited as required by Subpart F. Questioned costs: Undetermined. Cause: The Agency did not establish effective internal controls and procedures over subrecipient monitoring to ensure that it issued and monitored subawards in accordance with 2 CFR section 200.332. Effect: Failure to ensure subrecipients have obtained audits as required by Subpart F increases the risk that subrecipients may inappropriately spend and/or inaccurately track and report federal funds over multiple year periods, and these discrepancies may not be properly monitored, detected, or corrected on a timely basis. Questioned costs: Undetermined Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that an evaluation of independent audits is performed. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-011 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development State Agency: Agency of Commerce and Community Development Federal Program: Community Development Block Grant Assistance Listing Number: 14.228 Award Number and Year: B-20-DW-50-0001 (2020) B-20-DC-50-0001 (2020) B-21-DC-50-0001 (2021) 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 Agency of Commerce and Community Development was not in compliance with FSRS reporting requirements. Various subawards and subaward modifications were not reported to FSRS or inaccurately reported key data elements. Context: Three of eight subawards selected for testing were not in compliance with FFATA reporting requirements. The following exceptions were noted: ? 1 of 8 subawards were issued amendments to the original subaward, but the amendments were not reported to FSRS. ? 1 of 8 subawards were issued amendments to the original subaward, but the amendments were not reported accurately. ? 1 of 8 subawards reported the incorrect subaward obligation/action date (key data element). Cause: The Agency?s procedures were not sufficient to ensure that all subawards and subaward amendments were reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported accurately to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend the Agency review and enhance internal controls and procedures to ensure that all required subawards and subaward amendments are reported timely and accurately to FSRS no later than the end of the month following the month of issuance. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-009 Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI326301955A50 (5/20/2021 ? 12/31/2021) UI340892055A50 (10/1/2019 ? 12/31/2022) UI345252060A50 (1/1/2020 ? 9/30/2022) UI347462055A50 (4/1/2021 ? 6/30/2024) UI356792155A50 (10/1/2020 ? 12/31/2023) UI357352155A50 (10/1/2020 ? 9/30/2021) UI359762160A50 (1/1/2021 ? 9/30/2023) UI372542255A50 (10/1/2021 ? 12/31/2024) UI373112255A50 (10/1/2021 ? 9/30/2022) UI380102260A50 (1/1/2022 ? 9/30/2022) CARES Act PL 116-136 (3/13/2020 ? 9/6/2021) Compliance Requirement: Reporting Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 191, Financial Status of UCFE/UCX (OMB No. 1205-0162) ? Quarterly report on UCFE and UCX expenditures and the total amount of benefits paid to claimants of specific federal agencies (ET Handbook 401). Per federal regulations, the ETA 191 should be submitted electronically to the National Office by the 25th of the month following the close of the quarter. ETA 2112, UI Financial Transaction Summary (OMB No. 1205-0154) ? A monthly summary of transactions, which account for all funds received in, passed through, or paid out of the state unemployment fund (ET Handbook 401). Per federal regulations, the ETA 2112 should be submitted electronically to the National Office by the 1st day of the second month following the close of the reporting month. ETA 9130, Financial Status Report, UI Programs ? All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). ETA 9050, Time Lapse of All First Payments except Workshare ? The ETA 9050 report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. That data addressed first payment time lapse for total unemployment only. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. ETA 9052, Nonmonetary Determination Time Lapse Detection - The ETA 9052 report contains monthly information on the time it take states to issue nonmonetary determinations from the date the issues are first detected by the agency. Single-claimant and multi-claimant nonmonetary determinations are included in the report. Nonmonetary determinations made by organizational units such as Benefits Accuracy Measurement (BAM) and Benefit Payment Control (BPC) are also included in the report. Note: Overpayment notices on uncontested earnings detected by any method (e.g., crossmatch) should not be included. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. ETA 9055, Appeals Case Aging - The ETA 9055 report gathers monthly information on the inventory of lower authority and higher authority single claimant appeals cases that have been filed but not decided. Appeals case aging provides information about the number of days from the date an appeal was filed through the end of the month covered by the report. Also included are the average and median ages of the pending single claimant appeals cases. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. ETA 2208A, Quarterly UI Above-Base Report - The ETA 2208A is a quarterly report of staff years worked and paid by program category. Reports are submitted electronically to the National Office by the 30th of the month following the close of the quarter. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department was not able to provide support that it had submitted required financial and performance reports by the due dates nor that reports had been reviewed and approved by an authorized State official prior to submission. Questioned costs: Undetermined. Context: We reviewed a sample of the ETA 191, ETA 2112 and ETA 9130 financial reports, a sample of the ETA 9050, ETA 9052 and ETA 9055 performance reports, and a sample of ETA 2208A special reports filed during FY 2022. The following exceptions were noted: ETA 191: 2 of 2 quarterly reports reviewed were submitted after the required due date. Reports for the quarters ending 9/30/2021 and 3/31/2022 were both submitted 23 days late. In addition, support could not be provided to document that the reports had been reviewed and approved prior to submission. ETA 2112: Support could not be provided that 4 of 4 reports reviewed were submitted by the required due date. ETA 9130: Reports for the 9/30/2021 and 3/31/2022 quarters were reviewed which included 11 individual grant reports for each quarter, or 22 reports in total. 1 of 11 grant reports for the 9/30/2021 quarter was submitted after the due date. The report was due on 11/14/2021 but was submitted on 11/17/2021, or 3 days late. ETA 9050: Support could not be provided that 4 of 4 reports reviewed had been reviewed and approved prior to submission. ETA 9052: Support could not be provided that 4 of 4 reports reviewed were submitted by the required due date nor that the reports had been reviewed and approved prior to submission. ETA 9055: Support could not be provided that 4 of 4 reports reviewed were submitted by the required due date nor that the reports had been reviewed and approved prior to submission. ETA 2208A: 2 of 2 quarterly reports reviewed were submitted after the required due date. The report for the quarter ending 9/30/2021 was due by 10/30/2021 but was submitted on 11/10/2021, or 11 days late. The report for the quarter ending 3/31/2022 was due 4/30/2022 but was submitted on 6/17/2022, or 48 days late. Cause: The Department does not have sufficient internal controls in place over compliance with Unemployment Insurance reporting requirements to ensure that reports are submitted timely and that they are reviewed and approved prior to submission. Effect: Financial, performance and special reports were consistently submitted late. A lack of review and approval of financial and performance reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial and programmatic performance in the program. Recommendation: We recommend that policies and procedures be implemented to ensure that all financial, performance, and special reports are filed timely and accurately and that reports are reviewed and approved by an authorized State official prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: CARES Act PL 116-136 (3/27/2020 ? 9/6/2021) Compliance Requirement: Eligibility Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance ? State Workforce Agencies (SWA) responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state UI tax structure; (3) collecting state UI contributions from employers (commonly called ?unemployment taxes?); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program?s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state UC law that conforms with federal UC law. UIPL No. 16-20 ? The Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on December 27, 2020, included the Continued Assistance for Unemployed Workers Act of 2020 (Continued Assistance Act) in Division N, Title II, Subtitle A. The Continued Assistance Act extended the PUA program and enacted several program integrity measures, including a requirement that all individuals receiving a PUA payment on or after December 27, 2020, submit documentation substantiating employment, self-employment, or the planned commencement of employment or self-employment. The PUA program ended September 6, 2021. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Regular Unemployment Insurance program is administered by the Department of Labor (Department) and gives financial aid to unemployed individuals. In 2020, the federal government created new temporary unemployment insurance programs, including the Pandemic Unemployment Assistance (PUA) program, the Pandemic Emergency Unemployment Insurance (PEUC), and the Federal Pandemic Unemployment Compensation (FPUC) program, to further help individuals who lost their jobs due to COVID-19. The COVID-19 pandemic significantly increased the unemployment rate nationally and in Vermont. Before the pandemic, the national unemployment rate was about 4% in January 2020 and about 3% in Vermont. By April 2020, the national unemployment rate, and the Vermont rate both increased to about 15%. While the State?s unemployment rate declined to 2.2% percent in June 2022, the estimated unsupported claims and payments from these programs were significant to the State. Questioned costs: Undetermined. Context: Tests of effectiveness over controls surrounding PUA claims identified that thirty-eight (38) out of thirty-eight (38) PUA claims samples tested had no evidence of review nor timely review of wage support. Cause: The Department was unable to respond in a timely and effective manner to address the significant increase in claims and federal funds that continued throughout fiscal year 2022. Effect: The Department paid a significant amount of unsupported claims through the unemployment insurance program as a result of the COVID-19 pandemic. Claims were paid without the required wage support documentation and without review by the Department as required by USDOL. Recommendation: We recommend the State and the Department perform a thorough risk assessment over the unemployment insurance program and design controls and processes to address identified risks. Seeking continuous improvement to its risk assessment and internal processes is key to strengthening governance, risk management, internal controls, program management and overall operations within the program. Views of responsible officials: The Department acknowledges and accepts this finding, and as this is a repeat finding from last year?s ACFR audit, the Department maintains the same response and corrective action plan. The Pandemic Unemployment Assistance (PUA) program did not exist prior to the COVID-19 global health pandemic. Unlike the unemployment insurance program, which has been in existence since 1935, the PUA program did not have the inherent checks and balances built into the system to ensure proper program administration. Instead, state workforce agencies were expected to build the PUA program from the ground up with little guidance from the USDOL all the while managing through a pandemic that caused unprecedented upheaval in the employment status of millions of citizens. It is accurate that the Vermont Department of Labor was not able to implement the necessary checks and balances into the PUA program to ensure proper program eligibility. As has been pointed out in the audit finding, it was not until nine months after the start of the PUA program that Congress passed legislation that required documentation to be provided to substantiate program eligibility. At that time, due to the significant and unprecedented strains on the Department of Labor?s resources, the newly established documentation requirements were not able to be implemented prior to the end of the PUA program. The Department acknowledges that the lack of the ability to review claimant financial eligibility may have resulted in improper payments. It is important to point out that UIPL 16-20, Change 4 was issued on January 8, 2021, providing no time for UI programs to implement the required changes while still continuing to provide vital economic assistance to tens of thousands of individuals. The only other recourse available to the Department at that time would have been to stop program payments from issuing until the new eligibility requirements were reviewed. This would have left claimants without benefits for months while the Department used our limited financial and staff resources to implement the necessary changes. This is the result of the continuously changing eligibility requirements built from hastily implemented legislation and program design. In calendar year 2022, the Department began the process of retroactively reviewing all PUA claims that were filed and paid after the date of UIPL 16-20, Change 4 to ensure that proper documentation was provided to ensure program eligibility. Where appropriate, claims are being placed into an overpayment status and collection efforts will ensue.
Reference Number: 2022-014 Prior Year Finding: 2021-010 Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: State UC, UCFE, and UCX (7/1/2021 ? 6/31/2022) 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 excepted 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. Completion of Paid Claims Cases: ? 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. Completion of Denied Claims Cases: ? a minimum of 60 percent of cases must be completed within 60 days of the week ending date of the batch; ? 85 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. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) did not complete BAM case investigations within the time limits established in ET Handbook No. 395. Questioned costs: Undetermined. Context: Forty cases were selected for testing, of which 18 were Paid Claims and 22 were Denied Claims. We noted the following exceptions: ? The Department did not meet the required time limits for closing Paid Claims cases within 90 days. We noted that 83% of cases tested were closed within 90 days which is less than the required 95%. ? 2 of 40 cases were missing documentation of supervisory review and approval. Cause: The Department?s procedures were not sufficient to ensure that BAM case investigations were completed within the time limits required by the program and that documentation was maintained. Internal controls did not prevent or detect the errors. Effect: Noncompliance with BAM case investigation time limits and documentation requirements could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend that the Department review and enhance procedures and controls to ensure that BAM case investigations are completed timely, and that documentation of supervisory review and approval is maintained. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-015 Prior Year Finding: 2021-011 Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI345252060A50 (1/1/2020 ? 9/30/2022) UI359762160A50 (1/1/2021 ? 9/30/2023) UI380102260A50 (1/1/2022 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions: UI Reemployment Programs: RESEA Type of Finding Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: The UI program serves as one of the principal ?gateways? to the workforce system. It is often the first workforce program accessed by individuals who need workforce services. The WPRS and RESEA programs serve as UI?s primary programs that facilitate the reemployment needs of UI claimants. WPRS, which is mandated by Section 303(j) of the Social Security Act, is designed to identify UI claimants who are most likely to exhaust their benefits and need reemployment assistance to return to work, and refer them to appropriate reemployment services, such as: job search and job placement assistance; counseling; testing; provision of occupational and labor market information; and assessments. WPRS provides reemployment services to selected claimants through an early intervention process. The number of individuals served under WPRS is determined by the state (and/or local areas) based on its capacity to serve these individuals. UIPL No. 41-94 provides guidance on WPRS requirements. RESEA is authorized by Section 306 of the Social Security Act and builds on the success of RESEA?s predecessor, the former UI Reemployment and Eligibility Assessment (REA) program. RESEA uses an evidence-based integrated approach that combines an eligibility assessment for continuing UI eligibility and the provision of reemployment services. State administration of the RESEA is voluntary and under certain circumstances may be designed to also satisfy WPRS requirements. Operating guidance for the RESEA program is updated annually. UIPL 13-21 provides RESEA operating Guidance for FY 2021. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not retain documentation required by the RESEA program to verify compliance with federal program regulations. Controls were not working sufficiently to document that a staff member at the Department with knowledge of the program reviewed eligibility requirements prior to admission of participants to the RESEA program. Questioned costs: Undetermined. Context: Sixty cases were selected for testing and the following exceptions were noted: ? 5 of 60 samples selected were missing the Eligibility Review Questionnaire form and subsequently a lack of proper eligibility review and approval. ? 1 of 60 samples selected was missing a copy of the JobLink status and subsequently a lack of proper eligibility review and approval. ? 1 of 60 samples selected was missing documentation of adjudication. Cause: The Department?s procedures and internal controls are not sufficient to ensure compliance with RESEA requirements. Effect: Without clear documentation supporting a participant?s eligibility and supervisory review, it is possible that ineligible participants could receive benefits from the program. Recommendation: We recommend that policies and procedures be implemented to ensure that internal controls over RESEA include retention of documentation of each participant?s eligibility and review by a UI supervisor. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340892055A50 (10/1/2019 ? 12/31/2022) UI356792155A50 (10/1/2020 ? 12/31/2023) UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance: 2 CFR section 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented. 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 Labor (Department) charged costs to the program that were issued without documentation of supervisory review and approval. Questioned costs: None noted. The costs were determined to be allowable. Context: For five of forty general disbursement transactions selected for testing, the Department was unable to provide documentation of supervisory review and approval prior to issuance of payment to the vendor. Cause: The Department?s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Internal controls did not prevent or detect the errors. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the Department reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Period of Performance Type of Finding Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. 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: Costs were incurred and charged to the federal grant prior to the allowable start of the period of performance. Questioned costs: Below the reportable limit. Context: One of forty transactions was charged to the award before the allowable period of performance. The grant award start date was 10/1/2021 but a transaction dated 8/31/2021 in the amount of $7,421 was charged to the award. Cause: The Department of Labor?s (Department?s) procedures were not sufficient to ensure that expenditures charged to the program were incurred within the award?s period of performance. Internal controls did not prevent or detect the error. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award?s allowable period of performance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-012 Prior Year Finding: 2021-009 Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI326301955A50 (5/20/2021 ? 12/31/2021) UI340892055A50 (10/1/2019 ? 12/31/2022) UI345252060A50 (1/1/2020 ? 9/30/2022) UI347462055A50 (4/1/2021 ? 6/30/2024) UI356792155A50 (10/1/2020 ? 12/31/2023) UI357352155A50 (10/1/2020 ? 9/30/2021) UI359762160A50 (1/1/2021 ? 9/30/2023) UI372542255A50 (10/1/2021 ? 12/31/2024) UI373112255A50 (10/1/2021 ? 9/30/2022) UI380102260A50 (1/1/2022 ? 9/30/2022) CARES Act PL 116-136 (3/13/2020 ? 9/6/2021) Compliance Requirement: Reporting Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: ETA 191, Financial Status of UCFE/UCX (OMB No. 1205-0162) ? Quarterly report on UCFE and UCX expenditures and the total amount of benefits paid to claimants of specific federal agencies (ET Handbook 401). Per federal regulations, the ETA 191 should be submitted electronically to the National Office by the 25th of the month following the close of the quarter. ETA 2112, UI Financial Transaction Summary (OMB No. 1205-0154) ? A monthly summary of transactions, which account for all funds received in, passed through, or paid out of the state unemployment fund (ET Handbook 401). Per federal regulations, the ETA 2112 should be submitted electronically to the National Office by the 1st day of the second month following the close of the reporting month. ETA 9130, Financial Status Report, UI Programs ? All ETA grantees are required to submit quarterly financial reports for each grant award which they operate, including standard program and pilot, demonstration, and evaluation projects. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. A separate ETA 9130 is submitted for each of the following: UI, PEUC, and PUA Administration, DUA, TRA/RTAA, and UA Projects (administration and benefits). ETA 9050, Time Lapse of All First Payments except Workshare ? The ETA 9050 report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. That data addressed first payment time lapse for total unemployment only. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. ETA 9052, Nonmonetary Determination Time Lapse Detection - The ETA 9052 report contains monthly information on the time it take states to issue nonmonetary determinations from the date the issues are first detected by the agency. Single-claimant and multi-claimant nonmonetary determinations are included in the report. Nonmonetary determinations made by organizational units such as Benefits Accuracy Measurement (BAM) and Benefit Payment Control (BPC) are also included in the report. Note: Overpayment notices on uncontested earnings detected by any method (e.g., crossmatch) should not be included. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. ETA 9055, Appeals Case Aging - The ETA 9055 report gathers monthly information on the inventory of lower authority and higher authority single claimant appeals cases that have been filed but not decided. Appeals case aging provides information about the number of days from the date an appeal was filed through the end of the month covered by the report. Also included are the average and median ages of the pending single claimant appeals cases. The report is submitted electronically to the ETA National Office on the 20th of the month following the month to which the data relates. ETA 2208A, Quarterly UI Above-Base Report - The ETA 2208A is a quarterly report of staff years worked and paid by program category. Reports are submitted electronically to the National Office by the 30th of the month following the close of the quarter. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department was not able to provide support that it had submitted required financial and performance reports by the due dates nor that reports had been reviewed and approved by an authorized State official prior to submission. Questioned costs: Undetermined. Context: We reviewed a sample of the ETA 191, ETA 2112 and ETA 9130 financial reports, a sample of the ETA 9050, ETA 9052 and ETA 9055 performance reports, and a sample of ETA 2208A special reports filed during FY 2022. The following exceptions were noted: ETA 191: 2 of 2 quarterly reports reviewed were submitted after the required due date. Reports for the quarters ending 9/30/2021 and 3/31/2022 were both submitted 23 days late. In addition, support could not be provided to document that the reports had been reviewed and approved prior to submission. ETA 2112: Support could not be provided that 4 of 4 reports reviewed were submitted by the required due date. ETA 9130: Reports for the 9/30/2021 and 3/31/2022 quarters were reviewed which included 11 individual grant reports for each quarter, or 22 reports in total. 1 of 11 grant reports for the 9/30/2021 quarter was submitted after the due date. The report was due on 11/14/2021 but was submitted on 11/17/2021, or 3 days late. ETA 9050: Support could not be provided that 4 of 4 reports reviewed had been reviewed and approved prior to submission. ETA 9052: Support could not be provided that 4 of 4 reports reviewed were submitted by the required due date nor that the reports had been reviewed and approved prior to submission. ETA 9055: Support could not be provided that 4 of 4 reports reviewed were submitted by the required due date nor that the reports had been reviewed and approved prior to submission. ETA 2208A: 2 of 2 quarterly reports reviewed were submitted after the required due date. The report for the quarter ending 9/30/2021 was due by 10/30/2021 but was submitted on 11/10/2021, or 11 days late. The report for the quarter ending 3/31/2022 was due 4/30/2022 but was submitted on 6/17/2022, or 48 days late. Cause: The Department does not have sufficient internal controls in place over compliance with Unemployment Insurance reporting requirements to ensure that reports are submitted timely and that they are reviewed and approved prior to submission. Effect: Financial, performance and special reports were consistently submitted late. A lack of review and approval of financial and performance reports could allow incorrect data to be reported for the program which could misrepresent the State?s financial and programmatic performance in the program. Recommendation: We recommend that policies and procedures be implemented to ensure that all financial, performance, and special reports are filed timely and accurately and that reports are reviewed and approved by an authorized State official prior to submission. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-013 Prior Year Finding: 2021-012 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: CARES Act PL 116-136 (3/27/2020 ? 9/6/2021) Compliance Requirement: Eligibility Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance ? State Workforce Agencies (SWA) responsibilities include: (1) establishing specific, detailed policies and operating procedures which comply with the requirements of federal laws and regulations; (2) determining the state UI tax structure; (3) collecting state UI contributions from employers (commonly called ?unemployment taxes?); (4) determining claimant eligibility and disqualification provisions; (5) making payment of UI benefits to claimants; (6) managing the program?s revenue and benefit administrative functions; (7) administering the programs in accordance with established policies and procedures; and (8) enacting state UC law that conforms with federal UC law. UIPL No. 16-20 ? The Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on December 27, 2020, included the Continued Assistance for Unemployed Workers Act of 2020 (Continued Assistance Act) in Division N, Title II, Subtitle A. The Continued Assistance Act extended the PUA program and enacted several program integrity measures, including a requirement that all individuals receiving a PUA payment on or after December 27, 2020, submit documentation substantiating employment, self-employment, or the planned commencement of employment or self-employment. The PUA program ended September 6, 2021. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Regular Unemployment Insurance program is administered by the Department of Labor (Department) and gives financial aid to unemployed individuals. In 2020, the federal government created new temporary unemployment insurance programs, including the Pandemic Unemployment Assistance (PUA) program, the Pandemic Emergency Unemployment Insurance (PEUC), and the Federal Pandemic Unemployment Compensation (FPUC) program, to further help individuals who lost their jobs due to COVID-19. The COVID-19 pandemic significantly increased the unemployment rate nationally and in Vermont. Before the pandemic, the national unemployment rate was about 4% in January 2020 and about 3% in Vermont. By April 2020, the national unemployment rate, and the Vermont rate both increased to about 15%. While the State?s unemployment rate declined to 2.2% percent in June 2022, the estimated unsupported claims and payments from these programs were significant to the State. Questioned costs: Undetermined. Context: Tests of effectiveness over controls surrounding PUA claims identified that thirty-eight (38) out of thirty-eight (38) PUA claims samples tested had no evidence of review nor timely review of wage support. Cause: The Department was unable to respond in a timely and effective manner to address the significant increase in claims and federal funds that continued throughout fiscal year 2022. Effect: The Department paid a significant amount of unsupported claims through the unemployment insurance program as a result of the COVID-19 pandemic. Claims were paid without the required wage support documentation and without review by the Department as required by USDOL. Recommendation: We recommend the State and the Department perform a thorough risk assessment over the unemployment insurance program and design controls and processes to address identified risks. Seeking continuous improvement to its risk assessment and internal processes is key to strengthening governance, risk management, internal controls, program management and overall operations within the program. Views of responsible officials: The Department acknowledges and accepts this finding, and as this is a repeat finding from last year?s ACFR audit, the Department maintains the same response and corrective action plan. The Pandemic Unemployment Assistance (PUA) program did not exist prior to the COVID-19 global health pandemic. Unlike the unemployment insurance program, which has been in existence since 1935, the PUA program did not have the inherent checks and balances built into the system to ensure proper program administration. Instead, state workforce agencies were expected to build the PUA program from the ground up with little guidance from the USDOL all the while managing through a pandemic that caused unprecedented upheaval in the employment status of millions of citizens. It is accurate that the Vermont Department of Labor was not able to implement the necessary checks and balances into the PUA program to ensure proper program eligibility. As has been pointed out in the audit finding, it was not until nine months after the start of the PUA program that Congress passed legislation that required documentation to be provided to substantiate program eligibility. At that time, due to the significant and unprecedented strains on the Department of Labor?s resources, the newly established documentation requirements were not able to be implemented prior to the end of the PUA program. The Department acknowledges that the lack of the ability to review claimant financial eligibility may have resulted in improper payments. It is important to point out that UIPL 16-20, Change 4 was issued on January 8, 2021, providing no time for UI programs to implement the required changes while still continuing to provide vital economic assistance to tens of thousands of individuals. The only other recourse available to the Department at that time would have been to stop program payments from issuing until the new eligibility requirements were reviewed. This would have left claimants without benefits for months while the Department used our limited financial and staff resources to implement the necessary changes. This is the result of the continuously changing eligibility requirements built from hastily implemented legislation and program design. In calendar year 2022, the Department began the process of retroactively reviewing all PUA claims that were filed and paid after the date of UIPL 16-20, Change 4 to ensure that proper documentation was provided to ensure program eligibility. Where appropriate, claims are being placed into an overpayment status and collection efforts will ensue.
Reference Number: 2022-014 Prior Year Finding: 2021-010 Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: State UC, UCFE, and UCX (7/1/2021 ? 6/31/2022) 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 excepted 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. Completion of Paid Claims Cases: ? 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. Completion of Denied Claims Cases: ? a minimum of 60 percent of cases must be completed within 60 days of the week ending date of the batch; ? 85 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. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) did not complete BAM case investigations within the time limits established in ET Handbook No. 395. Questioned costs: Undetermined. Context: Forty cases were selected for testing, of which 18 were Paid Claims and 22 were Denied Claims. We noted the following exceptions: ? The Department did not meet the required time limits for closing Paid Claims cases within 90 days. We noted that 83% of cases tested were closed within 90 days which is less than the required 95%. ? 2 of 40 cases were missing documentation of supervisory review and approval. Cause: The Department?s procedures were not sufficient to ensure that BAM case investigations were completed within the time limits required by the program and that documentation was maintained. Internal controls did not prevent or detect the errors. Effect: Noncompliance with BAM case investigation time limits and documentation requirements could delay the detection and correction of inaccurate benefit payments and denied claims. Recommendation: We recommend that the Department review and enhance procedures and controls to ensure that BAM case investigations are completed timely, and that documentation of supervisory review and approval is maintained. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-015 Prior Year Finding: 2021-011 Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI345252060A50 (1/1/2020 ? 9/30/2022) UI359762160A50 (1/1/2021 ? 9/30/2023) UI380102260A50 (1/1/2022 ? 9/30/2022) Compliance Requirement: Special Tests and Provisions: UI Reemployment Programs: RESEA Type of Finding Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: The UI program serves as one of the principal ?gateways? to the workforce system. It is often the first workforce program accessed by individuals who need workforce services. The WPRS and RESEA programs serve as UI?s primary programs that facilitate the reemployment needs of UI claimants. WPRS, which is mandated by Section 303(j) of the Social Security Act, is designed to identify UI claimants who are most likely to exhaust their benefits and need reemployment assistance to return to work, and refer them to appropriate reemployment services, such as: job search and job placement assistance; counseling; testing; provision of occupational and labor market information; and assessments. WPRS provides reemployment services to selected claimants through an early intervention process. The number of individuals served under WPRS is determined by the state (and/or local areas) based on its capacity to serve these individuals. UIPL No. 41-94 provides guidance on WPRS requirements. RESEA is authorized by Section 306 of the Social Security Act and builds on the success of RESEA?s predecessor, the former UI Reemployment and Eligibility Assessment (REA) program. RESEA uses an evidence-based integrated approach that combines an eligibility assessment for continuing UI eligibility and the provision of reemployment services. State administration of the RESEA is voluntary and under certain circumstances may be designed to also satisfy WPRS requirements. Operating guidance for the RESEA program is updated annually. UIPL 13-21 provides RESEA operating Guidance for FY 2021. Internal 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 the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not retain documentation required by the RESEA program to verify compliance with federal program regulations. Controls were not working sufficiently to document that a staff member at the Department with knowledge of the program reviewed eligibility requirements prior to admission of participants to the RESEA program. Questioned costs: Undetermined. Context: Sixty cases were selected for testing and the following exceptions were noted: ? 5 of 60 samples selected were missing the Eligibility Review Questionnaire form and subsequently a lack of proper eligibility review and approval. ? 1 of 60 samples selected was missing a copy of the JobLink status and subsequently a lack of proper eligibility review and approval. ? 1 of 60 samples selected was missing documentation of adjudication. Cause: The Department?s procedures and internal controls are not sufficient to ensure compliance with RESEA requirements. Effect: Without clear documentation supporting a participant?s eligibility and supervisory review, it is possible that ineligible participants could receive benefits from the program. Recommendation: We recommend that policies and procedures be implemented to ensure that internal controls over RESEA include retention of documentation of each participant?s eligibility and review by a UI supervisor. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-016 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI340892055A50 (10/1/2019 ? 12/31/2022) UI356792155A50 (10/1/2020 ? 12/31/2023) UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compliance: 2 CFR section 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented. 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 Labor (Department) charged costs to the program that were issued without documentation of supervisory review and approval. Questioned costs: None noted. The costs were determined to be allowable. Context: For five of forty general disbursement transactions selected for testing, the Department was unable to provide documentation of supervisory review and approval prior to issuance of payment to the vendor. Cause: The Department?s procedures were not sufficient to ensure that payments were reviewed and approved prior to issuance of payment. Internal controls did not prevent or detect the errors. Effect: Unallowable costs could be charged to the program if disbursements are not reviewed by a supervisor who is knowledgeable of program regulations regarding allowable costs. Recommendation: We recommend the Department reviews and enhances its procedures and controls regarding payment processing to ensure that, prior to charging costs to the program, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of the review is maintained. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-017 Prior Year Finding: No Federal Agency: Department of Labor State Agency: Vermont Department of Labor (Department) Federal Program: Unemployment Insurance, COVID-19 ? Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI372542255A50 (10/1/2021 ? 12/31/2024) Compliance Requirement: Period of Performance Type of Finding Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. 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: Costs were incurred and charged to the federal grant prior to the allowable start of the period of performance. Questioned costs: Below the reportable limit. Context: One of forty transactions was charged to the award before the allowable period of performance. The grant award start date was 10/1/2021 but a transaction dated 8/31/2021 in the amount of $7,421 was charged to the award. Cause: The Department of Labor?s (Department?s) procedures were not sufficient to ensure that expenditures charged to the program were incurred within the award?s period of performance. Internal controls did not prevent or detect the error. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award?s allowable period of performance. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-024 Prior Year Finding: No Federal Agency: U.S. Department of Labor U.S. Department of Education State Agency: Department of Labor Agency of Education Department of Finance and Management Federal Program: Unemployment Insurance Title I Grants to Local Educational Agencies Special Education Cluster Assistance Listing Number: 17.225, 84.010, 84.027 and 84.173 Award Number and Year: UI340892055A50 (10/1/2019 ? 12/31/2022) UI356792155A50 (10/1/2020 ? 12/31/2023) UI372542255A50 (10/1/2021 ? 12/31/2024) S010A200045 (7/1/2020 ? 9/30/2021), S01A210045 (7/1/2021-9/30/2022) H027A200098 (7/1/2020 ? 9/30/2021), H173A200106 (7/1/2020 ? 9/30/2021), H027A210098 (7/1/2021 ? 9/30/2022), H173A210106 (7/1/2021 ? 9/30/2022) Compliance Requirement: Cash Management Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Per 2 CFR section 200.514(a)(5), if a State fails to request funds timely as set forth in 2 CFR section 205.29, or otherwise fails to apply a funding technique properly, we may deny any resulting Federal interest liability, notwithstanding any other provision of this section. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. 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 Labor (Department) and the Agency of Education (Agency) were not in compliance with the funding techniques included in the State? CMIA Treasury-State Agreement. Federal interest liabilities were improperly calculated on the CMIA Annual Report by the Department of Finance and Management (Finance) for Unemployment Insurance, Title I Grants to Local Educational Agencies, and the Special Education Cluster. Context: The following exceptions were noted when testing compliance with Cash Management: Department of Labor ? The Department was not in compliance with the Prior Month Actual funding technique included in the State?s Treasury-State Agreement. The funding technique requires cash draws to occur on a monthly basis, however, the Department performed multiple cash draws during certain months and other cash draws were performed inconsistently with this funding technique. We noted that the Department did not perform cash draws early, therefore, there is no State interest liability for these exceptions. Agency of Education ? The Agency was not in compliance with the funding techniques included in the State?s Treasury-State Agreement for the Title I Grants to Local Educational Agencies program and for the Special Education Cluster. The funding techniques for these programs required cash draws occur on a bi-weekly basis, or 26 times during the fiscal year. Instead, the Agency performed 11 cash draws on a random basis throughout the year. Department of Finance and Management ? Finance is the responsible State agency for submission of the CMIA Annual Report. The interest liability for the Unemployment Insurance program was calculated incorrectly and since the Agency of Education failed to request funds timely in accordance with the Treasury-State Agreement, a federal interest liability should not have been calculated for the Title I Grants to Local Education Agencies program nor for the Special Education Cluster. The following specific federal interest liability calculation errors were noted on the FY 2022 CMIA Annual Report: o $448 for Unemployment Insurance should have been calculated as $120. o $17,067 for Title I Grants to Local Educational Agencies should have been $0. o $12,706 for the Special Education Cluster should have been $0. Cause: The Agency?s and Department?s procedures were not sufficient to ensure that cash draws were performed timely per the terms of the Treasury-State Agreement. Internal controls did not detect or prevent these errors. Finance prepares the CMA Annual Report using data provided by the Agency and the Department. Finance?s CMIA Annual Report procedures were not sufficient to ensure that it calculated federal interest liabilities for these programs only when the State was entitled to this interest. Internal controls did not detect these errors prior to submission of the CMIA Annual Report. Effect: The Cash Management Improvement Act is intended to minimize the time between the transfer of federal funds to States and the payout of those funds for program purposes. When the Agency and Department do not draw down federal funds timely per the funding techniques included in the Treasury-State Agreement, it causes the State to advance its own funds for federal program purposes, negatively impacting the State?s cash flow. Improperly calculating Federal interest liabilities could potentially allow the State to receive interest payments to which it is not entitled per 2 CFR section 200.514. Questioned costs: Federal interest liabilities improperly calculated and included on the Annual Report: ? $328 for Unemployment Insurance, the difference between the $448 claimed and the allowable $120. ? $17,067 for Title I Grants to Local Educational Agencies ? $12,706 for the Special Education Cluster Recommendation: We recommend the Agency and the Department review and enhance their internal controls and procedures over cash management to ensure that cash draws are performed timely and in accordance with the funding techniques included in the State?s Treasury-State Agreement. We further recommend that Finance enhance its procedures and internal controls to ensure that federal interest liabilities are properly calculated in accordance with 2 CFR section 200.514. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-018 Prior Year Finding: 2021-013 Federal Agency: Department of the Treasury State Agency: Department of Finance and Management (Finance) Federal Program: COVID-19 ? Coronavirus Relief Fund COVID-19 ? Emergency Rental Assistance COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.019, 21.023, 21.027 Award Number and Year: SLT0049 (2020), SLT0083 (2020) ERA0029 (2021), ERAE0054 (2021), ERAE1023 (2021) SLFRP4407 (2021), SLFRP4563 (2021), SLFRP4453 (2021-2022) Compliance Requirement: Reporting: Schedule of Expenditures of Federal Awards Type of Finding Significant Deficiency in Internal Control Over Compliance Criteria or specific requirement: Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. The schedule must also include the total amount provided to subrecipients from each Federal program. 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: Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA) submitted to auditors, including errors in both total expenditures and the amount provided to subrecipients. Context: The following SEFA reporting errors were noted during audit test work: 1. The amount provided to subrecipients under assistance listing 21.023 ? Emergency Rental Assistance was understated by $118.8 million, or 99%. The amount originally reported was $1.3 million but during audit test work it was determined that this amount should have been $120.1 million. 2. The amount provided to subrecipients under assistance listing 21.027 ? Coronavirus State and Local Fiscal Recovery Funds was understated by $77.3 million, or 89%. The amount originally reported was $9.7 million but during audit test work it was determined that this amount should have been $87 million. 3. Total expenditures reported under assistance listing 21.027 ? Coronavirus State and Local Fiscal Recovery Funds were overstated by $6.2 million, or 6%. The amount originally reported was $107.8 million but during audit test work it was determined that this amount should have been $101.6 million. The original reported amount included duplicate expenditures of approximately $6 million. 4. The amount provided to subrecipients under assistance listing 21.019 ? Coronavirus Relief Fund could not be verified. During the prior year?s audit, significant reporting errors were noted in the amount provided to subrecipients. During the current year?s audit, Finance indicated that it had not yet fully implemented the FY 2021 corrective action plan for this issue and, as a result, it was unable to verify the accuracy of the amount reported as provided to subrecipients during FY 2022. Questioned costs: Undetermined. Cause: Individual State agencies/departments prepare their own sections of the SEFA and submit them to Finance which compiles the State?s consolidated report. Procedures and internal controls were not sufficient to ensure that expenditures reported by Finance on the SEFA were accurate and were supported by detail expenditure transactions recorded in the State?s accounting system. On the initial SEFA submitted to auditors, approximately $6 million had been duplicated in total expenditures under 21.027 - Coronavirus State and Local Fiscal Recovery Funds. Payments to subrecipients under Emergency Rental Assistance and Coronavirus State and Local Fiscal Recovery Funds were improperly coded in the State?s accounting system which caused them to be excluded when the SEFA was initially prepared. Further, the prior year?s corrective action plan had not been fully implemented to allow Finance to verify the accuracy of the amount reported as provided to subrecipients under the Coronavirus Relief Fund during FY 2022. Effect: The amount provided to subrecipients was incorrectly reported on the SEFA submitted to auditors which effected testing of subrecipient monitoring for the programs. Recommendation: We recommend that Finance improve its SEFA compilation process to ensure that program expenditures and the amounts provided to subrecipients reported on the State?s SEFA are complete and accurate. We further recommend that Finance work with the State?s agencies and departments to review and enhance procedures and controls to ensure that subrecipient payments are accurately recorded in the State?s accounting system and that expenditure information submitted to Finance for inclusion on the State?s SEFA is accurate and ties to detail expenditure transactions in the State?s accounting system. Views of responsible officials: Management agrees with the finding.
Reference Number: 2022-019 Prior Year Finding: No Federal Agency: Department of the Treasury State Agency: Agency of Commerce and Community Development Federal Program: COVID-19 ? Homeowner Assistance Fund Assistance Listing Number: 21.026 Award Number and Year: HAF0030 (5/3/2021 ? 9/30/2026) Compliance Requirement: Cash Management Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR 200.305(b)(9), interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS) through an electronic medium using either Automated Clearing House (ACH) network or a Fedwire Funds Service payment. Per the U.S. Treasury?s Homeowner Assistance Fund (HAF) Frequently Asked Questions on Reporting Requirements, Question 1.15, in accordance with 2 CFR 200.305(b)(9)(ii), HAF participants may retain up to $500 in earned interest annually. Any additional interest must be remitted annually to the Department of Health and Human Services Payment Management System (PMS) through an electronic medium using either Automated Clearing House (ACH) network or a Fedwire Funds Service payment. 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: HAF Program funds transferred to the Agency of Commerce and Community Development (Agency) by the U.S. Treasury were deposited into an interest-bearing account, but interest earned over $500 per year was not remitted to the Department of Health and Human Services Payment Management System as required. Context: The Agency received two deposits from the U.S. Treasury for the program, $5,000,000 received on 8/27/2021 and $45,000,000 received on 2/1/2022 after approval of the HAF Plan. Funds were deposited into an interest-bearing account, but interest earned on HAF funds was not calculated. As a result of the audit, the Vermont State Treasurer?s Office calculated interest earned for the program during calendar year 2021 and calendar year 2022. Total interest earned in excess of $500 per year is $2,165 for 2021 and $325,564 for 2022. Cause: The Agency did not develop sufficient procedures and internal controls to calculate interest earned on program funds and was unaware that it had earned interest in excess of $500 per year which should have been remitted to the Department of Health and Human Services. Effect: The State of Vermont retained interest earned on program funds and did not remit earnings over $500 per year to the Department of Health and Human Services as required. Questioned costs: Undetermined. Recommendation: We recommend the Agency work with U.S. Treasury officials regarding resolution of this matter. Views of responsible officials: Management agrees with the finding.