Program - Various, including AL 10.923 – Emergency Watershed Protection Program – Reporting Grant Number & Year - Various, including NR216526XXXXC004, December 7, 2020, through August 6, 2021 Federal Grantor Agency - Various, including U.S. Department of Agriculture Pass-Through Entity - Various Criteria - Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.510(b) (January 1, 2022) states, in part, the following: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. 2 CFR § 200.512(a)(1) (January 1, 2022) states the following: The audit must be completed and the data collection form described in paragraph (b) ofthis section and reporting package described in paragraph (c) of this section must besubmitted within the earlier of 30 calendar days after receipt of the auditor’s report(s),or nine months after the end of the audit period. If the due date falls on a Saturday,Sunday, or Federal holiday, the reporting package is due the next business day. 2 CFR § 200.508 (January 1, 2022) states, in part, the following: The auditee must: (a) Procure or otherwise arrange for the audit required by this part in accordance with §200.509, and ensure it is properly performed and submitted when due in accordance with §200.512. 2 CFR § 200.303 (January 1, 2022) states the following, in relevant part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘‘Standards for Internal Control in the Federal Government’’ issued by the Comptroller General of the United States or the ‘‘Internal Control Integrated Framework’’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). A good internal control plan requires adequate procedures to ensure the Schedule of Expenditures Federal Awards (SEFA) is presented properly and includes all Federal expenditures made by the County during the fiscal year. Additionally, those same procedures should ensure the Federal audit is completed and submitted to the Federal Audit Clearinghouse within the time frame required by Title 2 CFR § 200.512. Condition - The County did not have adequate procedures in place to monitor Federal expenditures and ensure the Schedule of Expenditures of Federal Awards (SEFA) was completed and submitted to the Federal Audit Clearinghouse in accordance with Title 2 CFR § 200.512. Repeat Finding - No Questioned Costs - None Statistical Sample - No Context - The County had a basic financial statement audit completed for the fiscal year ending June 30, 2022, which was issued on January 4, 2023, but that audit did not include the additional information necessary to meet Uniform Guidance and Single Audit Act requirements. When the audit for the fiscal year ending June 30, 2023, was completed, the Auditor of Public Accounts identified that the County should have had a Single Audit completed for the fiscal year ending June 30, 2022. Cause - Administration of Federal awards is decentralized, with each County office operating independently without any centralized reporting procedures in place to ensure all Federal expenditures of the County are reported accurately during the annual financial statement audit. Additionally, there is an overall lack of knowledge by County personnel related to Federal reporting requirements. Effect - Noncompliance with Federal regulations and an increased risk for the SEFA to be inaccurate, which could lead to Federal sanctions and Single Audits not being completed when required. Recommendation - We recommend the County establish written procedures to ensure the SEFA is complete and accurate. Such procedures may include, among other things, a requirement that all offices in the County responsible for administering Federal grants report their grant expenditures, as well as related information, to a single individual in the County with overall responsibility for Federal reporting requirements. That individual should be knowledgeable of all Federal reporting and compliance requirements, and review expenditures provided by each office to ensure all amounts are accurate and include all Federal expenditures of the County. Further, we recommend the County obtain necessary training related to Federal reporting requirements and ensure a Single Audit is completed and submitted to the Federal Audit Clearinghouse within the time frame required by Title 2 CFR § 200.512. View of Officials - The County will ensure County personnel obtain training to ensure there is a proper understanding of the Federal reporting requirements and preparation of the Schedule of Federal Awards.
2022-001 – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Headstart Cluster CFDA Number: 93.600 Federal Award Identification number: N/A Pass Through Entity: N/A Award Year: 2022 Condition: The Entity did not conduct a physical inventory in current year or prior year. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. Questioned costs: None Effect: The Entity could dispose of or lose federally funded equipment without following federal guidelines. Cause: The Entity does not have policies and procedures to ensure that the Entity is performing a physical inventory at a minimum of every two years.
2022-002 – Real Property Status Special Reporting – Significant Deficiency in Internal Controls over Compliance Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Headstart Cluster CFDA Number: 93.600 Federal Award Identification number: N/A Pass Through Entity: N/A Award Year: 2022 Condition: During our review of the SF-429 report, the EIN number was incorrect, there was no certifying signature, and the report was submitted after the due date. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 45 CFR 75.319(a), Title to Federally-owned property remains vested in the Federal Government, and the non-Federal entity must submit annually an inventory listing of Federally-owned property in its custody to the HHS awarding agency. The Form SF-429 is used for this reporting. Questioned costs: None Effect: The Entity’s real property may not be appropriately tracked by the Entity and the Federal government without current and accurate reporting. Use of an incorrect identifying number could cause discrepancies in Federal oversight of real property held by the Entity’s Federal program. Cause: The Entity does not have policies and procedures in place to ensure information is accurate and approved and submitted in a timely manner.
2022-001 – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Headstart Cluster CFDA Number: 93.600 Federal Award Identification number: N/A Pass Through Entity: N/A Award Year: 2022 Condition: The Entity did not conduct a physical inventory in current year or prior year. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. Questioned costs: None Effect: The Entity could dispose of or lose federally funded equipment without following federal guidelines. Cause: The Entity does not have policies and procedures to ensure that the Entity is performing a physical inventory at a minimum of every two years.
2022-002 – Real Property Status Special Reporting – Significant Deficiency in Internal Controls over Compliance Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Headstart Cluster CFDA Number: 93.600 Federal Award Identification number: N/A Pass Through Entity: N/A Award Year: 2022 Condition: During our review of the SF-429 report, the EIN number was incorrect, there was no certifying signature, and the report was submitted after the due date. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 45 CFR 75.319(a), Title to Federally-owned property remains vested in the Federal Government, and the non-Federal entity must submit annually an inventory listing of Federally-owned property in its custody to the HHS awarding agency. The Form SF-429 is used for this reporting. Questioned costs: None Effect: The Entity’s real property may not be appropriately tracked by the Entity and the Federal government without current and accurate reporting. Use of an incorrect identifying number could cause discrepancies in Federal oversight of real property held by the Entity’s Federal program. Cause: The Entity does not have policies and procedures in place to ensure information is accurate and approved and submitted in a timely manner.
2022-001 – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Headstart Cluster CFDA Number: 93.600 Federal Award Identification number: N/A Pass Through Entity: N/A Award Year: 2022 Condition: The Entity did not conduct a physical inventory in current year or prior year. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. Questioned costs: None Effect: The Entity could dispose of or lose federally funded equipment without following federal guidelines. Cause: The Entity does not have policies and procedures to ensure that the Entity is performing a physical inventory at a minimum of every two years.
2022-002 – Real Property Status Special Reporting – Significant Deficiency in Internal Controls over Compliance Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Headstart Cluster CFDA Number: 93.600 Federal Award Identification number: N/A Pass Through Entity: N/A Award Year: 2022 Condition: During our review of the SF-429 report, the EIN number was incorrect, there was no certifying signature, and the report was submitted after the due date. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 45 CFR 75.319(a), Title to Federally-owned property remains vested in the Federal Government, and the non-Federal entity must submit annually an inventory listing of Federally-owned property in its custody to the HHS awarding agency. The Form SF-429 is used for this reporting. Questioned costs: None Effect: The Entity’s real property may not be appropriately tracked by the Entity and the Federal government without current and accurate reporting. Use of an incorrect identifying number could cause discrepancies in Federal oversight of real property held by the Entity’s Federal program. Cause: The Entity does not have policies and procedures in place to ensure information is accurate and approved and submitted in a timely manner.
Inadequate Internal Controls over Compliance Federal Agency: U.S. Department of Agriculture Assistance Listing Numbers: 10.565, 10.568, and 10.569 Federal Program Names: Food Distribution Cluster Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K2764 Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2022, Coastal Harvest lacked sufficient internal controls over various federal awards processes surrounding compliance requirements for cash management, eligibility, and special tests and provisions. We have determined this to be a material weakness in internal control over compliance. Cause: Coastal Harvest had limited management and administrative staff during the year ended June 30, 2022. Further, as described in finding 2022-001, there were no written procedures in place to assign specific tasks to separate individuals. Effect: Inadequate controls could lead to noncompliance with compliance requirements that are material to the Organization, which may ultimately result in decreased funding for the Organization. Repeat Finding: Yes, finding number 2021-003. Recommendation: We recommend that management develops and implements internal controls over compliance with federal awards in accordance with the requirements of the Uniform Guidance. Views of Responsible Officials: There is no disagreement with the finding.
Inadequate Internal Controls over Compliance Federal Agency: U.S. Department of Agriculture Assistance Listing Numbers: 10.565, 10.568, and 10.569 Federal Program Names: Food Distribution Cluster Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K2764 Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2022, Coastal Harvest lacked sufficient internal controls over various federal awards processes surrounding compliance requirements for cash management, eligibility, and special tests and provisions. We have determined this to be a material weakness in internal control over compliance. Cause: Coastal Harvest had limited management and administrative staff during the year ended June 30, 2022. Further, as described in finding 2022-001, there were no written procedures in place to assign specific tasks to separate individuals. Effect: Inadequate controls could lead to noncompliance with compliance requirements that are material to the Organization, which may ultimately result in decreased funding for the Organization. Repeat Finding: Yes, finding number 2021-003. Recommendation: We recommend that management develops and implements internal controls over compliance with federal awards in accordance with the requirements of the Uniform Guidance. Views of Responsible Officials: There is no disagreement with the finding.
Inadequate Internal Controls over Compliance Federal Agency: U.S. Department of Agriculture Assistance Listing Numbers: 10.565, 10.568, and 10.569 Federal Program Names: Food Distribution Cluster Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K2764 Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2022, Coastal Harvest lacked sufficient internal controls over various federal awards processes surrounding compliance requirements for cash management, eligibility, and special tests and provisions. We have determined this to be a material weakness in internal control over compliance. Cause: Coastal Harvest had limited management and administrative staff during the year ended June 30, 2022. Further, as described in finding 2022-001, there were no written procedures in place to assign specific tasks to separate individuals. Effect: Inadequate controls could lead to noncompliance with compliance requirements that are material to the Organization, which may ultimately result in decreased funding for the Organization. Repeat Finding: Yes, finding number 2021-003. Recommendation: We recommend that management develops and implements internal controls over compliance with federal awards in accordance with the requirements of the Uniform Guidance. Views of Responsible Officials: There is no disagreement with the finding.
Inadequate Internal Controls over Compliance Federal Agency: U.S. Department of Agriculture Assistance Listing Numbers: 10.565, 10.568, and 10.569 Federal Program Names: Food Distribution Cluster Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K2764 Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2022, Coastal Harvest lacked sufficient internal controls over various federal awards processes surrounding compliance requirements for cash management, eligibility, and special tests and provisions. We have determined this to be a material weakness in internal control over compliance. Cause: Coastal Harvest had limited management and administrative staff during the year ended June 30, 2022. Further, as described in finding 2022-001, there were no written procedures in place to assign specific tasks to separate individuals. Effect: Inadequate controls could lead to noncompliance with compliance requirements that are material to the Organization, which may ultimately result in decreased funding for the Organization. Repeat Finding: Yes, finding number 2021-003. Recommendation: We recommend that management develops and implements internal controls over compliance with federal awards in accordance with the requirements of the Uniform Guidance. Views of Responsible Officials: There is no disagreement with the finding.
2022-006 Excess Food Service Fund Balance (Material Weakness) Federal Agency: U.S. Department of Agriculture Pass-through Agency: New Hampshire Department of Education Cluster/Program: Child Nutrition Cluster Assistance Listing Numbers: 10.553 & 10.555 Passed-through Identification: N/A Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the School District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 7 CFR, 210.14(b), Net Cash Resources, “the school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service.” Condition: During review of the food service unassigned fund balance, it was noted that the balance exceeded three months’ average expenditures. The unassigned fund balance in the food service fund amounted to $348,027 whereas three months’ average expenditures is $177,609. This generates excess fund balance of $170,418. Effect: The District is not in compliance with CFR Title 7, 210.14(b) by maintaining fund balance more than three months average expenditures. Cause: Lack of administrative oversight. Questioned Costs: $170,418. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District take immediate steps to reduce its net cash resources by having an acceptable, approved plan for using surplus fund balance. Since program funds must be used only for program purposes, excess fund balance must be reduced by improving the quality of food served or purchasing needed supplies, services, or equipment unless otherwise directed by the State of New Hampshire Department of Education. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00109-20; H80CS00109-21 Award Period: May 1, 2021 – April 30, 2022; May 1, 2022 – April 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: CFR § 200.303 Internal controls states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The organization did not maintain documentation to support the performance of an independent review and approval of the amounts to be drawn prior the draw occurred. Questioned costs: None. Context: This condition occurred in three (3) of five (5) transactions selected for testing. Cause: Turnover in key positions within the finance department. Effect: Drawdowns may occur for the incorrect amount, for the wrong period and for costs that may not have been incurred as of yet. Repeat Finding: Yes, prior year finding 2021-004. Recommendation: We recommend management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented with supporting documentation retained for the revised internal control. Views of responsible officials: There is no disagreement with this finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00109-20; H80CS00109-21 Award Period: May 1, 2021 – April 30, 2022; May 1, 2022 – April 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: CFR § 200.303 Internal controls states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The organization did not maintain documentation to support the performance of an independent review and approval of the amounts to be drawn prior the draw occurred. Questioned costs: None. Context: This condition occurred in three (3) of five (5) transactions selected for testing. Cause: Turnover in key positions within the finance department. Effect: Drawdowns may occur for the incorrect amount, for the wrong period and for costs that may not have been incurred as of yet. Repeat Finding: Yes, prior year finding 2021-004. Recommendation: We recommend management consider developing a contingency plan for when there is turnover in key personnel involved with the drawdown process of federal grants. As part of this plan, if changes need to occur to the primary internal control over drawdowns, those changes should be documented with supporting documentation retained for the revised internal control. Views of responsible officials: There is no disagreement with this finding.
Department of Health and Human Services Federal Assistance Listing #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 2 TIN#4550559322 Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the original expenditure listing which would have included the review of the expenditure listing, was not retained. As a part of the single audit, the Clinic recreated the expenditure listing to support the expenditures reported on the special report submitted to the Department of Health and Human Services for Period 2, however there was no control in place to retain the original documentation of the determination of expenditures and their related review. In addition, there was no retained documentation of the review and approval of the Clinic’s special report submitted to the Department of Health and Human Services for Period 2 TIN #4550559322. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listing and special report was documented and retained. In addition, the Clinic did not have an internal control policy in place to retain the original expenditure listing used to support the expenditures claimed on the special report. Effect: The lack of adequate policies governing review and approval over the expenditure listing and special report, and the retention of that listing and review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $100,891 of $157,739 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. There was one special report which was tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listing, and special report are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, meet the requirements of the federal program, and are properly recorded in the reports required to be submitted to the federal agency. View of Responsible Officials: Management agrees with the finding.
Department of Homeland Security Federal Assistance Listing #97.036 COVID‐19 Disaster Grants – Public Assistance Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Period of Performance Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the review and approval of the expenditure listings was not retained. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listings was documented and retained. Effect: The lack of adequate policies governing review and approval over the expenditure listings increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 42 of 209 expenditures were selected for testing, which accounted for $120,934 of $346,290 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. Repeat Finding from Prior Years: No Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listings are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, and meet the requirements of the federal program. View of Responsible Officials: Management agrees with the finding.
Department of Homeland Security Federal Assistance Listing #97.036 COVID‐19 Disaster Grants – Public Assistance Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Period of Performance Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the review and approval of the expenditure listings was not retained. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listings was documented and retained. Effect: The lack of adequate policies governing review and approval over the expenditure listings increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 42 of 209 expenditures were selected for testing, which accounted for $120,934 of $346,290 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. Repeat Finding from Prior Years: No Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listings are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, and meet the requirements of the federal program. View of Responsible Officials: Management agrees with the finding.
Department of Homeland Security Federal Assistance Listing #97.036 COVID‐19 Disaster Grants – Public Assistance Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Period of Performance Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the review and approval of the expenditure listings was not retained. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listings was documented and retained. Effect: The lack of adequate policies governing review and approval over the expenditure listings increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 42 of 209 expenditures were selected for testing, which accounted for $120,934 of $346,290 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. Repeat Finding from Prior Years: No Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listings are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, and meet the requirements of the federal program. View of Responsible Officials: Management agrees with the finding.
Department of Homeland Security Federal Assistance Listing #97.036 COVID‐19 Disaster Grants – Public Assistance Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Period of Performance Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the review and approval of the expenditure listings was not retained. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listings was documented and retained. Effect: The lack of adequate policies governing review and approval over the expenditure listings increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 42 of 209 expenditures were selected for testing, which accounted for $120,934 of $346,290 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. Repeat Finding from Prior Years: No Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listings are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, and meet the requirements of the federal program. View of Responsible Officials: Management agrees with the finding.
Department of Homeland Security Federal Assistance Listing #97.036 COVID‐19 Disaster Grants – Public Assistance Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Period of Performance Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award. Condition: During our testing, it was noted that the review and approval of the expenditure listings was not retained. Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listings was documented and retained. Effect: The lack of adequate policies governing review and approval over the expenditure listings increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 42 of 209 expenditures were selected for testing, which accounted for $120,934 of $346,290 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program. Repeat Finding from Prior Years: No Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listings are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, and meet the requirements of the federal program. View of Responsible Officials: Management agrees with the finding.
Excess Food Service Fund Balance (Material Weakness) Federal Agency: U.S. Department of Agriculture Pass-through Agency: New Hampshire Department of Education Cluster/Program: Child Nutrition Cluster Assistance Listing Numbers: 10.553 & 10.555 Passed-through Identification: N/A Compliance Requirement: Special Tests and Provisions Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the School District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 7 CFR, 210.14(b), Net Cash Resources, “the school food authority shall limit its net cash resources to an amount that does not exceed 3 months average expenditures for its nonprofit school food service.” Condition: During review of the food service unassigned fund balance, it was noted that the balance exceeded three months’ average expenditures. The fund balance in the food service fund amounted to $61,039 whereas three months’ average expenditures is $50,130. This generates excess fund balance of $10,909. Effect: The District is not in compliance with CFR Title 7, 210.14(b) by maintaining fund balance more than three months average expenditures. Cause: Lack of administrative oversight. Questioned Costs: $10,909. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the School District take immediate steps to reduce its net cash resources by having an acceptable, approved plan for using surplus fund balance. Since program funds must be used only for program purposes, excess fund balance must be reduced by improving the quality of food served or purchasing needed supplies, services, or equipment unless otherwise directed by the State of New Hampshire Department of Education. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2022-003: Reporting – FISAP Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.24(e)(i) requires an institution to maintain records to support the data contained in the FISAP. Condition: The University submitted inaccurate data in its annual FISAP report. Questioned Costs: None. Context: Section F Independent Taxable Income With Baccalaureate total per the FISAP is 5 but the support provide shows the total is 9. Graduate total per the FISAP is 25 but the support provide shows the total is 37. Cause: Due to change in management and turnover in office, in completing the data entry, there was no oversight to ensure reporting was accurate to the supporting University records. Effect: The information in the FISAP is utilized to assist in the awarding of future awards and incorrect data could negatively impact future awards. Repeat Finding: No Recommendation: We recommend the applicable campus revise procedures to ensure that the record retention requirements are met and supporting documentation agrees to the FISAP, including a supervisory review by someone other than the preparer. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-004: Special Tests & Provision – Outstanding Checks over 240 Days Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2022. Questioned Costs: $45,109. Context: During our audit procedures, it was noted that the University had 84 Title IV outstanding checks at June 30, 2022, that aged over 240 days. The outstanding checks have not been canceled or the funds returned to the Secretary. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures related to Title IV outstanding checks. Effect: The University is not in compliance with Department of Education requirements that all student refund checks that are outstanding for more than 240 days be returned to the Department. Repeat Finding: No Recommendation: We recommend that the University review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-005: Special Tests & Provisions – Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34CFR section 682.610 states that all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a Roster file. Rosters must be returned within 15 days and any subsequent error records must be returned within 10 days. Condition: The University’s June 2022 roster was not returned within 15 days of receipt. The University did not maintain reporting records for 13 of 38 students selected for testing. It was noted that 1 of the 38 students' enrollment status per institution records and NSLDS did not agree. Questioned Costs: None Context: While the University is reporting enrollment to the Clearinghouse each month, the June enrollment roster was not returned within the required 15-day period. While the University is reporting enrollment changes, it does not have adequate policies and procedure to ensure documentation for reporting is accurately reported and retained. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures to ensure accurate, timely, and complete enrollment reporting. Effect: National Student Loan Database System (NSLDS) is not updated with the student information which can cause over awarding should the student transfer to another institution and the students may not properly enter the repayment period. Repeat Finding: Yes – 2021-003. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all enrollment records are reported correctly and within the required time period. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-006: Special Tests and Provisions – Return of Title IV Funding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR §668.22]. Condition: The return to Title IV funding calculations performed on students withdrawn from the eligibility sample did not include a control process to review and approve the calculations for accuracy prior to changes being made to the student’s award. Questioned Costs: None. Context: During our audit procedures, the calculations that were preformed did not include documentation of the control process to review and approve the calculations prior to changes being made to the student’s award. Cause: The University must maintain adequate data and documentation, but due to change in management and turnover in office, there was a lack of conveying institutional knowledge and processes. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: Yes – 2021-004. Recommendation: We recommend the institution maintain proper documentation in accordance with federal grantor requirements and ensure that the documents are readily available for review upon request, including monitoring of students with triggering events that require a return to Title IV calculation to be completed, reviewed, and approved. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-007: Reporting – Common Origination and Disbursement (COD) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- From the 2022-23 FSA Handbook: to be in compliance with reporting disbursements and disbursement adjustments within 15 days. The date funds are credited to a student’s account in the institution’s general ledger or any subledger of the general ledger or paid to a student directly is the disbursement date the financial aid office reports to COD. The Common Origination and Disbursement (COD) additional requirements are: (1) Schools must use the COD system to request and receive federal student aid funds, including Direct Loans, Pell Grants, and Campus-Based aid programs. Schools must ensure that all disbursements of federal student aid are made through the COD system. (2) Schools must reconcile their records with the COD system to ensure that all disbursements are accurately reported and recorded. (3) Schools must comply with COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. Condition: For one (1) of 33 students tested, the Fall 2022 disbursement dates in COD for Pell did not match the disbursement date on the student ledgers. Questioned Costs: None. Context: The Fall 2022 disbursement dates in COD for the student in question is October 29, 2021, but on the student ledger the date is December 15, 2021. Cause: Employee turnover during the 2021-2022 academic year caused this process to not be completed accurately. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: No Recommendation: We recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-009: Special Tests and Provisions – The Gramm-Leach-Bliley Act (GLBA) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our audit procedures, it was noted that the University did not conduct a risk assessment that addresses (2) and (3) of the 3 areas noted in 16 CFR 314.4 (b) which are (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures and document safeguards for identified risks. Cause: The University experienced turnover in the department responsible for this process and had a ransomware cyber-attack during the year ended June 30, 2022. Effect: The student personal information could be vulnerable. Repeat Finding: Yes – 2021-002. Recommendation: We recommend the University engage a third party or perform the risk assessment for the two areas required by the Gramm-Leach-Bliley Act that have not been completed and documented and ensure that there are documented safeguards for identified risks. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-003: Reporting – FISAP Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.24(e)(i) requires an institution to maintain records to support the data contained in the FISAP. Condition: The University submitted inaccurate data in its annual FISAP report. Questioned Costs: None. Context: Section F Independent Taxable Income With Baccalaureate total per the FISAP is 5 but the support provide shows the total is 9. Graduate total per the FISAP is 25 but the support provide shows the total is 37. Cause: Due to change in management and turnover in office, in completing the data entry, there was no oversight to ensure reporting was accurate to the supporting University records. Effect: The information in the FISAP is utilized to assist in the awarding of future awards and incorrect data could negatively impact future awards. Repeat Finding: No Recommendation: We recommend the applicable campus revise procedures to ensure that the record retention requirements are met and supporting documentation agrees to the FISAP, including a supervisory review by someone other than the preparer. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-004: Special Tests & Provision – Outstanding Checks over 240 Days Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2022. Questioned Costs: $45,109. Context: During our audit procedures, it was noted that the University had 84 Title IV outstanding checks at June 30, 2022, that aged over 240 days. The outstanding checks have not been canceled or the funds returned to the Secretary. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures related to Title IV outstanding checks. Effect: The University is not in compliance with Department of Education requirements that all student refund checks that are outstanding for more than 240 days be returned to the Department. Repeat Finding: No Recommendation: We recommend that the University review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-005: Special Tests & Provisions – Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34CFR section 682.610 states that all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a Roster file. Rosters must be returned within 15 days and any subsequent error records must be returned within 10 days. Condition: The University’s June 2022 roster was not returned within 15 days of receipt. The University did not maintain reporting records for 13 of 38 students selected for testing. It was noted that 1 of the 38 students' enrollment status per institution records and NSLDS did not agree. Questioned Costs: None Context: While the University is reporting enrollment to the Clearinghouse each month, the June enrollment roster was not returned within the required 15-day period. While the University is reporting enrollment changes, it does not have adequate policies and procedure to ensure documentation for reporting is accurately reported and retained. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures to ensure accurate, timely, and complete enrollment reporting. Effect: National Student Loan Database System (NSLDS) is not updated with the student information which can cause over awarding should the student transfer to another institution and the students may not properly enter the repayment period. Repeat Finding: Yes – 2021-003. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all enrollment records are reported correctly and within the required time period. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-006: Special Tests and Provisions – Return of Title IV Funding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR §668.22]. Condition: The return to Title IV funding calculations performed on students withdrawn from the eligibility sample did not include a control process to review and approve the calculations for accuracy prior to changes being made to the student’s award. Questioned Costs: None. Context: During our audit procedures, the calculations that were preformed did not include documentation of the control process to review and approve the calculations prior to changes being made to the student’s award. Cause: The University must maintain adequate data and documentation, but due to change in management and turnover in office, there was a lack of conveying institutional knowledge and processes. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: Yes – 2021-004. Recommendation: We recommend the institution maintain proper documentation in accordance with federal grantor requirements and ensure that the documents are readily available for review upon request, including monitoring of students with triggering events that require a return to Title IV calculation to be completed, reviewed, and approved. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-007: Reporting – Common Origination and Disbursement (COD) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- From the 2022-23 FSA Handbook: to be in compliance with reporting disbursements and disbursement adjustments within 15 days. The date funds are credited to a student’s account in the institution’s general ledger or any subledger of the general ledger or paid to a student directly is the disbursement date the financial aid office reports to COD. The Common Origination and Disbursement (COD) additional requirements are: (1) Schools must use the COD system to request and receive federal student aid funds, including Direct Loans, Pell Grants, and Campus-Based aid programs. Schools must ensure that all disbursements of federal student aid are made through the COD system. (2) Schools must reconcile their records with the COD system to ensure that all disbursements are accurately reported and recorded. (3) Schools must comply with COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. Condition: For one (1) of 33 students tested, the Fall 2022 disbursement dates in COD for Pell did not match the disbursement date on the student ledgers. Questioned Costs: None. Context: The Fall 2022 disbursement dates in COD for the student in question is October 29, 2021, but on the student ledger the date is December 15, 2021. Cause: Employee turnover during the 2021-2022 academic year caused this process to not be completed accurately. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: No Recommendation: We recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-009: Special Tests and Provisions – The Gramm-Leach-Bliley Act (GLBA) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our audit procedures, it was noted that the University did not conduct a risk assessment that addresses (2) and (3) of the 3 areas noted in 16 CFR 314.4 (b) which are (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures and document safeguards for identified risks. Cause: The University experienced turnover in the department responsible for this process and had a ransomware cyber-attack during the year ended June 30, 2022. Effect: The student personal information could be vulnerable. Repeat Finding: Yes – 2021-002. Recommendation: We recommend the University engage a third party or perform the risk assessment for the two areas required by the Gramm-Leach-Bliley Act that have not been completed and documented and ensure that there are documented safeguards for identified risks. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-003: Reporting – FISAP Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.24(e)(i) requires an institution to maintain records to support the data contained in the FISAP. Condition: The University submitted inaccurate data in its annual FISAP report. Questioned Costs: None. Context: Section F Independent Taxable Income With Baccalaureate total per the FISAP is 5 but the support provide shows the total is 9. Graduate total per the FISAP is 25 but the support provide shows the total is 37. Cause: Due to change in management and turnover in office, in completing the data entry, there was no oversight to ensure reporting was accurate to the supporting University records. Effect: The information in the FISAP is utilized to assist in the awarding of future awards and incorrect data could negatively impact future awards. Repeat Finding: No Recommendation: We recommend the applicable campus revise procedures to ensure that the record retention requirements are met and supporting documentation agrees to the FISAP, including a supervisory review by someone other than the preparer. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-004: Special Tests & Provision – Outstanding Checks over 240 Days Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2022. Questioned Costs: $45,109. Context: During our audit procedures, it was noted that the University had 84 Title IV outstanding checks at June 30, 2022, that aged over 240 days. The outstanding checks have not been canceled or the funds returned to the Secretary. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures related to Title IV outstanding checks. Effect: The University is not in compliance with Department of Education requirements that all student refund checks that are outstanding for more than 240 days be returned to the Department. Repeat Finding: No Recommendation: We recommend that the University review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-005: Special Tests & Provisions – Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34CFR section 682.610 states that all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a Roster file. Rosters must be returned within 15 days and any subsequent error records must be returned within 10 days. Condition: The University’s June 2022 roster was not returned within 15 days of receipt. The University did not maintain reporting records for 13 of 38 students selected for testing. It was noted that 1 of the 38 students' enrollment status per institution records and NSLDS did not agree. Questioned Costs: None Context: While the University is reporting enrollment to the Clearinghouse each month, the June enrollment roster was not returned within the required 15-day period. While the University is reporting enrollment changes, it does not have adequate policies and procedure to ensure documentation for reporting is accurately reported and retained. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures to ensure accurate, timely, and complete enrollment reporting. Effect: National Student Loan Database System (NSLDS) is not updated with the student information which can cause over awarding should the student transfer to another institution and the students may not properly enter the repayment period. Repeat Finding: Yes – 2021-003. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all enrollment records are reported correctly and within the required time period. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-006: Special Tests and Provisions – Return of Title IV Funding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR §668.22]. Condition: The return to Title IV funding calculations performed on students withdrawn from the eligibility sample did not include a control process to review and approve the calculations for accuracy prior to changes being made to the student’s award. Questioned Costs: None. Context: During our audit procedures, the calculations that were preformed did not include documentation of the control process to review and approve the calculations prior to changes being made to the student’s award. Cause: The University must maintain adequate data and documentation, but due to change in management and turnover in office, there was a lack of conveying institutional knowledge and processes. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: Yes – 2021-004. Recommendation: We recommend the institution maintain proper documentation in accordance with federal grantor requirements and ensure that the documents are readily available for review upon request, including monitoring of students with triggering events that require a return to Title IV calculation to be completed, reviewed, and approved. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-007: Reporting – Common Origination and Disbursement (COD) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- From the 2022-23 FSA Handbook: to be in compliance with reporting disbursements and disbursement adjustments within 15 days. The date funds are credited to a student’s account in the institution’s general ledger or any subledger of the general ledger or paid to a student directly is the disbursement date the financial aid office reports to COD. The Common Origination and Disbursement (COD) additional requirements are: (1) Schools must use the COD system to request and receive federal student aid funds, including Direct Loans, Pell Grants, and Campus-Based aid programs. Schools must ensure that all disbursements of federal student aid are made through the COD system. (2) Schools must reconcile their records with the COD system to ensure that all disbursements are accurately reported and recorded. (3) Schools must comply with COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. Condition: For one (1) of 33 students tested, the Fall 2022 disbursement dates in COD for Pell did not match the disbursement date on the student ledgers. Questioned Costs: None. Context: The Fall 2022 disbursement dates in COD for the student in question is October 29, 2021, but on the student ledger the date is December 15, 2021. Cause: Employee turnover during the 2021-2022 academic year caused this process to not be completed accurately. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: No Recommendation: We recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-008: Eligibility – Pell Awarding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.063 Award Number and Year: P063P213807(March 23, 2021 - August 31, 2027) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 34 CFR 668.60(c), the institution shall adjust the student's award when an over award or under award is caused by the change in the expected family contribution. That adjustment must be made— (i) Within the same award year—if possible—to correct any overpayment or underpayment; or (ii) During the next award year to correct any overpayment that could not be adjusted during the year in which the student was overpaid. Condition: Students were disbursed Pell funds inaccurately. Questioned Costs: $4,317 Context: During our audit procedures, it was noted that four (4) of 33 students tested, the Pell amount disbursed was less than what the student was eligible. Cause: The University experienced turnover in the department responsible for this process. Effect: Students are not disbursed correct funds they are eligible to receive during the school year. Repeat Finding: No Recommendation: We recommend the University implement policies to review all student award packages at the start of the academic year to ensure no over and under awards exist. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-009: Special Tests and Provisions – The Gramm-Leach-Bliley Act (GLBA) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our audit procedures, it was noted that the University did not conduct a risk assessment that addresses (2) and (3) of the 3 areas noted in 16 CFR 314.4 (b) which are (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures and document safeguards for identified risks. Cause: The University experienced turnover in the department responsible for this process and had a ransomware cyber-attack during the year ended June 30, 2022. Effect: The student personal information could be vulnerable. Repeat Finding: Yes – 2021-002. Recommendation: We recommend the University engage a third party or perform the risk assessment for the two areas required by the Gramm-Leach-Bliley Act that have not been completed and documented and ensure that there are documented safeguards for identified risks. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-003: Reporting – FISAP Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.24(e)(i) requires an institution to maintain records to support the data contained in the FISAP. Condition: The University submitted inaccurate data in its annual FISAP report. Questioned Costs: None. Context: Section F Independent Taxable Income With Baccalaureate total per the FISAP is 5 but the support provide shows the total is 9. Graduate total per the FISAP is 25 but the support provide shows the total is 37. Cause: Due to change in management and turnover in office, in completing the data entry, there was no oversight to ensure reporting was accurate to the supporting University records. Effect: The information in the FISAP is utilized to assist in the awarding of future awards and incorrect data could negatively impact future awards. Repeat Finding: No Recommendation: We recommend the applicable campus revise procedures to ensure that the record retention requirements are met and supporting documentation agrees to the FISAP, including a supervisory review by someone other than the preparer. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-004: Special Tests & Provision – Outstanding Checks over 240 Days Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2022. Questioned Costs: $45,109. Context: During our audit procedures, it was noted that the University had 84 Title IV outstanding checks at June 30, 2022, that aged over 240 days. The outstanding checks have not been canceled or the funds returned to the Secretary. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures related to Title IV outstanding checks. Effect: The University is not in compliance with Department of Education requirements that all student refund checks that are outstanding for more than 240 days be returned to the Department. Repeat Finding: No Recommendation: We recommend that the University review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-005: Special Tests & Provisions – Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34CFR section 682.610 states that all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a Roster file. Rosters must be returned within 15 days and any subsequent error records must be returned within 10 days. Condition: The University’s June 2022 roster was not returned within 15 days of receipt. The University did not maintain reporting records for 13 of 38 students selected for testing. It was noted that 1 of the 38 students' enrollment status per institution records and NSLDS did not agree. Questioned Costs: None Context: While the University is reporting enrollment to the Clearinghouse each month, the June enrollment roster was not returned within the required 15-day period. While the University is reporting enrollment changes, it does not have adequate policies and procedure to ensure documentation for reporting is accurately reported and retained. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures to ensure accurate, timely, and complete enrollment reporting. Effect: National Student Loan Database System (NSLDS) is not updated with the student information which can cause over awarding should the student transfer to another institution and the students may not properly enter the repayment period. Repeat Finding: Yes – 2021-003. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all enrollment records are reported correctly and within the required time period. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-006: Special Tests and Provisions – Return of Title IV Funding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR §668.22]. Condition: The return to Title IV funding calculations performed on students withdrawn from the eligibility sample did not include a control process to review and approve the calculations for accuracy prior to changes being made to the student’s award. Questioned Costs: None. Context: During our audit procedures, the calculations that were preformed did not include documentation of the control process to review and approve the calculations prior to changes being made to the student’s award. Cause: The University must maintain adequate data and documentation, but due to change in management and turnover in office, there was a lack of conveying institutional knowledge and processes. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: Yes – 2021-004. Recommendation: We recommend the institution maintain proper documentation in accordance with federal grantor requirements and ensure that the documents are readily available for review upon request, including monitoring of students with triggering events that require a return to Title IV calculation to be completed, reviewed, and approved. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-007: Reporting – Common Origination and Disbursement (COD) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- From the 2022-23 FSA Handbook: to be in compliance with reporting disbursements and disbursement adjustments within 15 days. The date funds are credited to a student’s account in the institution’s general ledger or any subledger of the general ledger or paid to a student directly is the disbursement date the financial aid office reports to COD. The Common Origination and Disbursement (COD) additional requirements are: (1) Schools must use the COD system to request and receive federal student aid funds, including Direct Loans, Pell Grants, and Campus-Based aid programs. Schools must ensure that all disbursements of federal student aid are made through the COD system. (2) Schools must reconcile their records with the COD system to ensure that all disbursements are accurately reported and recorded. (3) Schools must comply with COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. Condition: For one (1) of 33 students tested, the Fall 2022 disbursement dates in COD for Pell did not match the disbursement date on the student ledgers. Questioned Costs: None. Context: The Fall 2022 disbursement dates in COD for the student in question is October 29, 2021, but on the student ledger the date is December 15, 2021. Cause: Employee turnover during the 2021-2022 academic year caused this process to not be completed accurately. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: No Recommendation: We recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-009: Special Tests and Provisions – The Gramm-Leach-Bliley Act (GLBA) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned Costs: None Context: During our audit procedures, it was noted that the University did not conduct a risk assessment that addresses (2) and (3) of the 3 areas noted in 16 CFR 314.4 (b) which are (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures and document safeguards for identified risks. Cause: The University experienced turnover in the department responsible for this process and had a ransomware cyber-attack during the year ended June 30, 2022. Effect: The student personal information could be vulnerable. Repeat Finding: Yes – 2021-002. Recommendation: We recommend the University engage a third party or perform the risk assessment for the two areas required by the Gramm-Leach-Bliley Act that have not been completed and documented and ensure that there are documented safeguards for identified risks. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-010: Internal Control and Compliance – Higher Education Emergency Relief Funds (HEERF) Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund (ESF) Assistance Listing Number: 84.425E, 84.425F Award Number and Year: P425E201739 (May 1, 2020 – June 30, 2023), P425F200479 (May 1, 2020 – June 30, 2023), Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The University must comply with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) – HEERF I for all applicable assistance listing numbers under 84.425E and 84.425F, which were continued under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) – HEERF II and American Rescue Plan (ARP) – HEERF III as to the use of the funds and required reporting. Condition: During the year 2022, the University continued to utilize the HEERF Student Aid Portion and the HEERF Institutional Portion. Collectively, the HEERF awards (or program) was a major federal program for the year ended June 30, 2022. The internal controls over the compliance and administration of the new program requires management of the University to comply with all direct and material compliance requirements outlined in the federal Compliance Supplement for 2022 for the HEERF program. While the University established a plan to distribute funds to students in accordance with the requirements and to cover qualified expenditures for the institution portion, it failed to properly maintain detailed records of the actual distributions to each student so that a reconciliation of the distributed funds could be reconciled to the subsidiary accounts in the general ledger. In addition, the University failed to properly maintain its documentation of the lost revenue calculation as required by the CARES Act and the expenditure detail for the institution portion. The University also failed to provide complete evidence of the quarterly and annual reporting as required under the CARES Act, CRRSAA, and ARP regulations. Questioned Costs: $518,388 Context: During the audit procedures, the University was unable to provide documentation for required compliance testing, specifically: • Activities Allowed and Unallowed – Institutional Portion • Allowable Costs – Institutional Portion • Cash Management – Student and Institutional Portion • Period of Performance Testing – Institutional Portion • Procurement Testing – Institutional Portion • Suspension and Debarment Testing – Institutional Portion • Reporting Testing Cause: The University experienced turnover in the department responsible for this process. Effect: The University is unable to adequately document its compliance with the requirements of the HEERF program administered. Reports submitted are not in compliance with the reporting and information-sharing requirements established by the Department of Education. Expenditures may be incorrectly charged to the program. Repeat Finding: Yes – 2021-005. Recommendation: We recommend the institutions strengthen their understanding of the compliance and reporting requirements established by grant programs and ensure supporting documentation is maintained to substantiate amounts reported, compliance with requirements is supported by University records, and ensure that federal expenditures are properly identified and classified. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-010: Internal Control and Compliance – Higher Education Emergency Relief Funds (HEERF) Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund (ESF) Assistance Listing Number: 84.425E, 84.425F Award Number and Year: P425E201739 (May 1, 2020 – June 30, 2023), P425F200479 (May 1, 2020 – June 30, 2023), Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: 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 be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The University must comply with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) – HEERF I for all applicable assistance listing numbers under 84.425E and 84.425F, which were continued under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) – HEERF II and American Rescue Plan (ARP) – HEERF III as to the use of the funds and required reporting. Condition: During the year 2022, the University continued to utilize the HEERF Student Aid Portion and the HEERF Institutional Portion. Collectively, the HEERF awards (or program) was a major federal program for the year ended June 30, 2022. The internal controls over the compliance and administration of the new program requires management of the University to comply with all direct and material compliance requirements outlined in the federal Compliance Supplement for 2022 for the HEERF program. While the University established a plan to distribute funds to students in accordance with the requirements and to cover qualified expenditures for the institution portion, it failed to properly maintain detailed records of the actual distributions to each student so that a reconciliation of the distributed funds could be reconciled to the subsidiary accounts in the general ledger. In addition, the University failed to properly maintain its documentation of the lost revenue calculation as required by the CARES Act and the expenditure detail for the institution portion. The University also failed to provide complete evidence of the quarterly and annual reporting as required under the CARES Act, CRRSAA, and ARP regulations. Questioned Costs: $518,388 Context: During the audit procedures, the University was unable to provide documentation for required compliance testing, specifically: • Activities Allowed and Unallowed – Institutional Portion • Allowable Costs – Institutional Portion • Cash Management – Student and Institutional Portion • Period of Performance Testing – Institutional Portion • Procurement Testing – Institutional Portion • Suspension and Debarment Testing – Institutional Portion • Reporting Testing Cause: The University experienced turnover in the department responsible for this process. Effect: The University is unable to adequately document its compliance with the requirements of the HEERF program administered. Reports submitted are not in compliance with the reporting and information-sharing requirements established by the Department of Education. Expenditures may be incorrectly charged to the program. Repeat Finding: Yes – 2021-005. Recommendation: We recommend the institutions strengthen their understanding of the compliance and reporting requirements established by grant programs and ensure supporting documentation is maintained to substantiate amounts reported, compliance with requirements is supported by University records, and ensure that federal expenditures are properly identified and classified. Views of Responsible Officials: There is no disagreement with the audit finding.
EMPLOYMENT DEVELOPMENT DEPARTMENT Reference Number: 2022-001 Type of Finding: Material Weakness and Material Instance of Noncompliance Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart F - Audit Requirements. §200.510 Financial statements (2 CFR 200.510): (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (3) 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. For a cluster of programs also provide the total for the cluster. Condition The State of California (State) has a decentralized financial reporting process, which requires State agencies and departments to provide specific financial information to the Department of Finance (Finance) in order to annually compile the Schedule of Expenditures of Federal Awards (Schedule). In its effort to more efficiently and accurately prepare the Schedule in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Finance developed the Single Audit Expenditures Reporting Database (Database). Finance developed the Database to include all of the relevant data fields necessary to compile and produce the Schedule. Finance also created a Single Audit Database User Manual, which provides specific guidance to users for accessing and navigating through the database. Due to the unprecedented impacts from the COVID-19 pandemic, the Employment Development Department (EDD) was unable to timely report to Finance through the Database with accurate and reliable federal cash basis expenditures for its largest federal award program that it administers, the Unemployment Insurance (ALN 17.225) program. The delay resulted in Finance being unable to compile and produce a complete and final approved Schedule until December 2023. Although an initial estimated expenditure amount was reported by EDD of $27.0 billion, the final amount reported in the Schedule was $23.3 billion. Cause Given the substantial increase in claimants seeking assistance under the Unemployment Insurance program resulting from the COVID-19 pandemic, EDD was overwhelmed with the administration of the Unemployment Insurance program. Effect The difficulties that EDD encountered from the COVID-19 pandemic, resulted in the late reporting and submission of final federal cash basis expenditures to Finance. The untimely submission continued to limit and constrain Finance from compiling and producing a final complete and accurate Schedule. Questioned Costs Questioned costs were not determinable. Recommendation EDD should continue to evaluate existing processes and controls related to its ability to properly report, and timely submit complete and accurate federal award cash basis expenditures to the Database, which affords Finance the ability to timely compile and produce a final Schedule pursuant to the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan EDD agrees with this finding. The deferred transition to FI$Cal and the difficulties experienced thereafter have continued to cause EDD to be late with submitting year-end financials and its ability to submit timely the cash basis expenditures into the Single Audit Expenditures Reporting Database (Database). In addition, the onset of the COVID-19 pandemic created additional issues which ultimately impacted the EDD’s ability to submit timely year-end financials. However, the EDD continues to make progress to gain ground in the department’s efforts to follow the State’s deadlines for submitting year-end financials and entering the cash basis expenditures into the Database. During fiscal year 2022-23, the EDD completed a restructuring within the accounting area which realigned workload amongst the units and provided additional resources in critical areas. These changes will have a lasting effect and help the department to be better positioned going forward in processing the accounting workload and ultimately be able to catch up and submit year-end financials and enter the cash basis expenditures into the Database by the State’s deadlines. In addition, the EDD took lessons learned from the financial audits from the prior two fiscal years to update processes and procedures and applied that knowledge going forward. Also, staff continue to participate in various trainings offered by the Department of Finance and the Department of FI$Cal. In addition, staff work with the control agencies when issues arise that would impact our accounting functions.
EMPLOYMENT DEVELOPMENT DEPARTMENT Reference Number: 2022-001 Type of Finding: Material Weakness and Material Instance of Noncompliance Criteria Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart F - Audit Requirements. §200.510 Financial statements (2 CFR 200.510): (b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (3) 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. For a cluster of programs also provide the total for the cluster. Condition The State of California (State) has a decentralized financial reporting process, which requires State agencies and departments to provide specific financial information to the Department of Finance (Finance) in order to annually compile the Schedule of Expenditures of Federal Awards (Schedule). In its effort to more efficiently and accurately prepare the Schedule in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Finance developed the Single Audit Expenditures Reporting Database (Database). Finance developed the Database to include all of the relevant data fields necessary to compile and produce the Schedule. Finance also created a Single Audit Database User Manual, which provides specific guidance to users for accessing and navigating through the database. Due to the unprecedented impacts from the COVID-19 pandemic, the Employment Development Department (EDD) was unable to timely report to Finance through the Database with accurate and reliable federal cash basis expenditures for its largest federal award program that it administers, the Unemployment Insurance (ALN 17.225) program. The delay resulted in Finance being unable to compile and produce a complete and final approved Schedule until December 2023. Although an initial estimated expenditure amount was reported by EDD of $27.0 billion, the final amount reported in the Schedule was $23.3 billion. Cause Given the substantial increase in claimants seeking assistance under the Unemployment Insurance program resulting from the COVID-19 pandemic, EDD was overwhelmed with the administration of the Unemployment Insurance program. Effect The difficulties that EDD encountered from the COVID-19 pandemic, resulted in the late reporting and submission of final federal cash basis expenditures to Finance. The untimely submission continued to limit and constrain Finance from compiling and producing a final complete and accurate Schedule. Questioned Costs Questioned costs were not determinable. Recommendation EDD should continue to evaluate existing processes and controls related to its ability to properly report, and timely submit complete and accurate federal award cash basis expenditures to the Database, which affords Finance the ability to timely compile and produce a final Schedule pursuant to the Uniform Guidance. Views of Responsible Officials and Corrective Action Plan EDD agrees with this finding. The deferred transition to FI$Cal and the difficulties experienced thereafter have continued to cause EDD to be late with submitting year-end financials and its ability to submit timely the cash basis expenditures into the Single Audit Expenditures Reporting Database (Database). In addition, the onset of the COVID-19 pandemic created additional issues which ultimately impacted the EDD’s ability to submit timely year-end financials. However, the EDD continues to make progress to gain ground in the department’s efforts to follow the State’s deadlines for submitting year-end financials and entering the cash basis expenditures into the Database. During fiscal year 2022-23, the EDD completed a restructuring within the accounting area which realigned workload amongst the units and provided additional resources in critical areas. These changes will have a lasting effect and help the department to be better positioned going forward in processing the accounting workload and ultimately be able to catch up and submit year-end financials and enter the cash basis expenditures into the Database by the State’s deadlines. In addition, the EDD took lessons learned from the financial audits from the prior two fiscal years to update processes and procedures and applied that knowledge going forward. Also, staff continue to participate in various trainings offered by the Department of Finance and the Department of FI$Cal. In addition, staff work with the control agencies when issues arise that would impact our accounting functions.