2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain 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.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain 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.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
STUDENT FINANCIAL ASSISTANCE CLUSTER FINDINGSFINDING 2022-003 - Internal Control over Compliance (Repeat Finding 2021-003, 2020-001, 2019-002, 2018-003, 2017-002,2015-002, 2014-008)Federal ProgramsDepartments of Education and Department of Health and Human ServicesStudent Financial Assistance Cluster (Various Assistance Listing numbers)Award year ended June 30, 2022Department of EducationEducation Stabilization Fund (COVID-19) (Assistance Listing number 84.425E)Award year ended June 30, 2022Criteria2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internalcontrol over the Federal award to provide reasonable assurance that they are managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federal award.ConditionAt the University of Nevada, Reno (?UNR?), University of Nevada, Las Vegas (?UNLV?), and System ComputingServices (?SCS?), we noted deficiencies in security administration related to the information technology general controls(?ITGCs?) in the PeopleSoft application. Specifically, controls were lacking around restriction of elevated access, useraccess reviews, termination of access and segregation of duties as it relates to the PeopleSoft application over thestudent financial assistance program.ContextDuring our testing of the ITGCs in the PeopleSoft application, we noted the following segregation of duties issues: (1)At UNLV, UNR and SCS, several users have both PeopleSoft Administrator rights within the Production and DevelopmentEnvironment. (2) At UNLV, four users have both Production and Development environment access which allows them tomodify PS objects and perform change management duties. (3) At UNR, three users have both Production and Developmentenvironment access which allows them to modify PS objects and perform change management duties. (4) At SCS, UNR andUNLV, no appropriate level of review of the activities performed by users with access to modify production during the auditperiod. (5) At SCS, four users have both Production and Development environment access which allows them to modify PSobjects and perform change management duties. (6) At SCS, UNR and UNLV, activity performed by users with segregationof duties conflicts (see 1-3, 5 above), are not formally reviewed on a periodic basis for appropriateness.The deficiencies in security administration controls could impact compliance requirements related to determiningeligibility, disbursements, return of Title IV funds and verification.Questioned Costs$0Effect1. Security Administration (#4) and Change Management (#1-3, #5 & #6)-Student data within the PeopleSoft applicationmay be affected by users having conflicting roles or access levels, and accountability may not be established. Studentdata may be affected by unauthorized, inappropriate, or untested changes to the system. This could impact eligibility,disbursements, return of Title IV funds and verification.CauseThe issues identified are part of the lack of effective ITGCs in the PeopleSoft application. Recommendation1. Security Administration (#4) - Management should perform a formally documented periodic review of user activities.2. Change Management(#1-3, #5-6 & #7) - Management should segregate duties and remove users with access toboth the Development and Production environments (limiting them to be able to access just one environment) orimplement a formal review process over the activities performed by those responsible for program maintenance on aperiodic basis.Views of Responsible Officials (unaudited)Management concurs.
2022 ? 003 ? Special Education Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over Compliance.Criteria: ?2 CFR 200.303 states in part:"The non-Federal entity must:Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 180.300 states:"When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person."Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost PrinciplesFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v)2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."(vi) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Condition: During our testing we that an effective internal control system was not in place to ensure compliance with requirements related to allowable costs. Additionally, time and effort procedures were not in place during the audit period.Questioned costs: Known - $80,310.67, Likely - $330,748.52. Known and questioned costs exceed program materiality.Context: In a statistically valid sample, 40 of 40 selections did not have adequate time and effort documentation along with proper timesheets, resulting in questioned costs.Cause: Per discussion with business manager and per testing performed, CLA noted the school did not have time and effort implemented, as they believe they were not required to.Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Special Education Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over Compliance.Criteria: ?2 CFR 200.303 states in part:"The non-Federal entity must:Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 180.300 states:"When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person."Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost PrinciplesFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v)2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."(vi) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Condition: During our testing we that an effective internal control system was not in place to ensure compliance with requirements related to allowable costs. Additionally, time and effort procedures were not in place during the audit period.Questioned costs: Known - $80,310.67, Likely - $330,748.52. Known and questioned costs exceed program materiality.Context: In a statistically valid sample, 40 of 40 selections did not have adequate time and effort documentation along with proper timesheets, resulting in questioned costs.Cause: Per discussion with business manager and per testing performed, CLA noted the school did not have time and effort implemented, as they believe they were not required to.Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Special Education Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over Compliance.Criteria: ?2 CFR 200.303 states in part:"The non-Federal entity must:Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 180.300 states:"When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person."Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost PrinciplesFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v)2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."(vi) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Condition: During our testing we that an effective internal control system was not in place to ensure compliance with requirements related to allowable costs. Additionally, time and effort procedures were not in place during the audit period.Questioned costs: Known - $80,310.67, Likely - $330,748.52. Known and questioned costs exceed program materiality.Context: In a statistically valid sample, 40 of 40 selections did not have adequate time and effort documentation along with proper timesheets, resulting in questioned costs.Cause: Per discussion with business manager and per testing performed, CLA noted the school did not have time and effort implemented, as they believe they were not required to.Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 003 ? Special Education Cluster ? Suspension and DebarmentFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Significant Deficiency in Internal Control over Compliance.Criteria: ?2 CFR 200.303 states in part:"The non-Federal entity must:Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 180.300 states:"When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person."Condition: During our testing, we noted Suspension and debarment checks were not performed on the contract sampled. Per the school?s procurement policy, it stated that a certification of suspension and debarment needed to be completed prior to entering into a contract for all contracts over the $25,000 threshold.Questioned costs: NoneContext: Using a statistically valid sample, 1 covered transaction was selected for testing. The Transaction selected did not have a suspension and debarment certification prior to entering in a contract with the vendor.Cause: Improper understanding and implementation of existing policies.Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the South Montgomery Community School Corporation increased training for those individuals involved in procurement and contract approval to ensure suspension and debarment checks are performed prior to awarding contracts.View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 004 ? Special Education Cluster (IDEA) Activities Allowed or Unallowed & Allowable Costs/Cost PrinciplesFederal Agency: U.S. Department of EducationFederal Program Title: Special Education Cluster (IDEA)Assistance Listing Number: 84.027/84.173Federal Award Identification Number and Year: FY 21 and FY 22Pass-Through Entity: Indiana Department of EducationPass-Through Entity Number: 19611-76-PN01Award Period: July 1, 2020 through June 30, 2022Type of Finding:? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion)Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v)2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."(vi) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and(vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Condition: During our testing we that an effective internal control system was not in place to ensure compliance with requirements related to allowable costs. Additionally, time and effort procedures were not in place during the audit period.Questioned costs: Known - $80,310.67, Likely - $330,748.52. Known and questioned costs exceed program materiality.Context: In a statistically valid sample, 40 of 40 selections did not have adequate time and effort documentation along with proper timesheets, resulting in questioned costs.Cause: Per discussion with business manager and per testing performed, CLA noted the school did not have time and effort implemented, as they believe they were not required to.Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance.Repeat Finding: No.Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial.View of Responsible Officials: There is no disagreement with the audit finding.
FINDING 2022-003Subject: Special Education Cluster (IDEA) - EarmarkingFederal Agency: Department of EducationFederal Program: Special Education Grants to StatesAssistance Listings Number: 84.027Federal Award Number and Year (or Other Identifying Numbers): 20611-115-PN01Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Matching, Level of Effort, EarmarkingAudit Findings: Material Weakness; Other MattersCondition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the earmarking requirements of the Matching,Level of Effort, Earmarking, compliance requirement.The School Corporation did not have adequate procedures in place to ensure that the requiredlevel of expenditures for non-public students with disabilities was met for all grants that ended or were fullyexpended during the audit period. For one of three grants tested, the Non-Public Proportionate Shareexpenditures could not be verified. Additionally, a waiver was not requested.The lack of internal controls and noncompliance were isolated to the 20611-115-PN01 grant award.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.403 states in part:"Except where otherwise authorized by statute, costs must meet the following general criteriain order to be allowable under Federal awards: . . .(g) Be adequately documented. . . ."2 CFR 200.208(b) states in part: "The Federal awarding agency or pass-through entity may adjustspecific Federal award conditions as needed . . ."511 IAC 7-34-7(b) states:"The public agency, in providing special education and related services to students in nonpublicschools must expend at least an amount that is the same proportion of the public agency totalsubgrant under 20 U.S.C. 1411(f) as the number of nonpublic school students with disabilities,who are enrolled by their parents in nonpublic schools within its boundaries, is to the totalnumber of students with disabilities of the same age range."CauseManagement had not developed an effective system of internal controls that would have ensuredcompliance with the grant agreement and the earmarking requirements of the Matching, Level of Effort,Earmarking compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the earmarking requirements of the Matching, Levelof Effort, Earmarking compliance requirement could result in the loss of future federal funds to the SchoolCorporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish a system of internalcontrols, as well as appropriately document and identify federal award expenditures to ensure compliancewith the Matching, Level of Effort, Earmarking compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: Special Education Cluster (IDEA) - Suspension and DebarmentFederal Agency: Department of EducationFederal Program: Special Education Grants to StatesAssistance Listings Number: 84.027Federal Award Numbers and Years (or Other Identifying Numbers): 20611-115-PN01, 21611-115-PN01,22611-115-PN01Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Procurement and Suspension and DebarmentAudit Findings: Material Weakness; Other MattersRepeat FindingThis is a repeat finding from the immediately prior audit report. The prior audit finding number was2020-002.Condition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the suspension and debarment requirementsof the Procurement and Suspension and Debarment compliance requirement.The School Corporation did not follow procedures established by the grant agreement to ensurethat applicable vendors who received federal funds were not suspended or debarred from participation infederal awards programs. The School Corporation entered into a contract that exceeded $25,000 forpsychological services. The School Corporation did not perform procedures to ensure that the vendor wasnot suspended or debarred from participation in federal programs.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 180.300 states:"When you enter into a covered transaction with another person at the next lower tier, you mustverify that the person with whom you intend to do business is not excluded or disqualified. Youdo this by:(a) Checking SAM Exclusions; or(b) Collecting a certification from that person; or(c) Adding a clause or condition to the covered transaction with that person."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the suspension and debarment requirements of the Procurement andSuspension and Debarment compliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the suspension and debarment requirementsof the Procurement and Suspension and Debarment compliance requirement could result in the loss offuture federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish an internal control systemto ensure compliance and comply with the grant agreement and the Procurement and Suspension andDebarment compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004Subject: Special Education Cluster (IDEA) - Suspension and DebarmentFederal Agency: Department of EducationFederal Program: Special Education Grants to StatesAssistance Listings Number: 84.027Federal Award Numbers and Years (or Other Identifying Numbers): 20611-115-PN01, 21611-115-PN01,22611-115-PN01Pass-Through Entity: Indiana Department of EducationCompliance Requirement: Procurement and Suspension and DebarmentAudit Findings: Material Weakness; Other MattersRepeat FindingThis is a repeat finding from the immediately prior audit report. The prior audit finding number was2020-002.Condition and ContextAn effective internal control system was not in place at the School Corporation to ensure compliancewith requirements related to the grant agreement and the suspension and debarment requirementsof the Procurement and Suspension and Debarment compliance requirement.The School Corporation did not follow procedures established by the grant agreement to ensurethat applicable vendors who received federal funds were not suspended or debarred from participation infederal awards programs. The School Corporation entered into a contract that exceeded $25,000 forpsychological services. The School Corporation did not perform procedures to ensure that the vendor wasnot suspended or debarred from participation in federal programs.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 180.300 states:"When you enter into a covered transaction with another person at the next lower tier, you mustverify that the person with whom you intend to do business is not excluded or disqualified. Youdo this by:(a) Checking SAM Exclusions; or(b) Collecting a certification from that person; or(c) Adding a clause or condition to the covered transaction with that person."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the grant agreement and the suspension and debarment requirements of the Procurement andSuspension and Debarment compliance requirement.EffectThe failure to establish an effective internal control system enabled material noncompliance to goundetected. Noncompliance with the grant agreement and the suspension and debarment requirementsof the Procurement and Suspension and Debarment compliance requirement could result in the loss offuture federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish an internal control systemto ensure compliance and comply with the grant agreement and the Procurement and Suspension andDebarment compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor annually, from the date of the submission of the quarterly or annual financial report, respectively,as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor annually, from the date of the submission of the quarterly or annual financial report, respectively,as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor annually, from the date of the submission of the quarterly or annual financial report, respectively,as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005Subject: COVID-19 - Education Stabilization Fund - ReportingFederal Agency: Department of EducationFederal Program: COVID-19 - Education Stabilization FundAssistance Listings Numbers: 84.425D, 84.425UFederal Award Numbers and Years (or Other Identifying Numbers): S425D20013, S425D210013,S425U210013Pass-Through Entity: Indiana Department of EducationCompliance Requirement: ReportingAudit Findings: Material Weakness, Other MattersCondition and ContextAn effective internal control system was not designed, nor implemented, at the School Corporationto ensure compliance with requirements related to the grant agreement and the Reporting compliancerequirement.The School Corporation completed and submitted four annual Data Collection reports (Reports) forthe Elementary and Secondary School Emergency Relief (ESSER) grants. The Reports were prepared byone employee without an oversite or review process in place to prevent, or detect and correct, errors.Additionally, one of the four Reports tested was not supported by the School Corporation's records.The financial information provided did not agree to all the data submitted in the Report; therefore, we couldnot determine the accuracy of the Report. Additionally, two of six key line items selected for testing couldnot be traced to supporting documentation.The lack of internal controls and noncompliance were systemic issues throughout the audit period.Criteria2 CFR 200.303 states in part:"The non-Federal entity must:(a) Establish and maintain effective internal control over the Federal award that providesreasonable assurance that the non-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the terms and conditions of the Federalaward. These internal controls should be in compliance with guidance in 'Standards forInternal Control in the Federal Government' issued by the Comptroller General of theUnited States or the 'Internal Control Integrated Framework', issued by the Committee ofSponsoring Organizations of the Treadway Commission (COSO). . . ."2 CFR 200.302(b) states in part:"The financial management system of each non-Federal entity must provide for the following:. . .(2) Accurate, current, and complete disclosure of the financial results of each Federalaward or program in accordance with the reporting requirements set forth in ?? 200.328and 200.329. . . ."34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and formatthat assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out otherresponsibilities under the program."2 CFR 200.334 states in part:"Financial records, supporting documents, statistical records, and all other non-Federal entityrecords pertinent to a Federal award must be retained for a period of three years from the dateof submission of the final expenditure report or, for Federal awards that are renewed quarterlyor annually, from the date of the submission of the quarterly or annual financial report, respectively,as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient.. . ."34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance withprogram requirements."CauseManagement had not developed a system of internal controls that would have ensured compliancewith the Reporting compliance requirement.EffectThe failure to establish an effective internal control system enabled noncompliance to go undetected.Noncompliance with the grant agreement and the Reporting compliance requirement could resultin the loss of future federal funds to the School Corporation.Questioned CostsThere were no questioned costs identified.RecommendationWe recommended that the School Corporation's management establish effective internal controlsto ensure compliance and comply with the grant agreement and the Reporting compliance requirement.Views of Responsible OfficialsFor the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Reference Number: 2022-006Federal Agency: U.S. Department of Housing and Urban DevelopmentFederal Program: CDBG Entitlement Grant ClusterAssistance Listing Number: 14.218Award Number and Period: B-21-UC-24-0011, B-20-UW-24-0011Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding: Significant Deficiency in Internal Controls over Compliance, Other MattersCriteria or specific requirement:Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v) Comply with the established accounting policies and practices of the non-Federal entity;(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish an 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 statues, regulations, and the terms and conditions of the Federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 5 of 40 time and effort certifications tested.Cause:The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.Effect:There is an increased risk of charging unallowed payroll costs to the program.Questioned Costs:$3,494Recommendation:The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-006Federal Agency: U.S. Department of Housing and Urban DevelopmentFederal Program: CDBG Entitlement Grant ClusterAssistance Listing Number: 14.218Award Number and Period: B-21-UC-24-0011, B-20-UW-24-0011Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding: Significant Deficiency in Internal Controls over Compliance, Other MattersCriteria or specific requirement:Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v) Comply with the established accounting policies and practices of the non-Federal entity;(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish an 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 statues, regulations, and the terms and conditions of the Federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 5 of 40 time and effort certifications tested.Cause:The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.Effect:There is an increased risk of charging unallowed payroll costs to the program.Questioned Costs:$3,494Recommendation:The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-004Federal Agency: U.S. Department of TreasuryFederal Program: COVID-19-Emergency Rental AssistanceAssistance Listing Number: 21.023Award Number and Year: 2021Compliance Requirement: ReportingType of Finding: Material Weakness in Internal Control over Compliance, Material NoncomplianceCriteria or specific requirement:Compliance: Monthly and quarterly reports are required to be submitted in accordance with Treasury guidance beginning in the first quarter of 2021 through September of 2022 for ERA1 and through September of 2025 for ERA 2. The monthly and quarterly reports are required to be submitted by the 15th of the following month.Control ? Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:For 15 of the 15 reports tested, we were unable to obtain supporting documentation to tie out the key line items on the report. We also were unable to determine if the reports were submitted timely. For 3 out of 15 reports tested, there was no evidence of review and approval of the report prior to submission.Cause:The County did not have adequate controls to ensure supporting documentation, including documentation on timely submission was retained for all reports submitted and reports were properly reviewed and approved prior to submission.Effect:The County was not in compliance with the programs reporting requirements and lacked internal controls over the review and approval of reports.Questioned Costs:UndeterminedRecommendation:We recommend that management review their policies and procedures to ensure that all monthly and quarterly reports showing timely submission and the supporting documentation used to prepare the reports are retained for audit purposes. We further recommend that all reports be reviewed and approved by someone other than the preparer prior to submission.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-007Federal Agency: U.S. Department of TreasuryFederal Program: COVID-19-Emergency Rental AssistanceAssistance Listing Number: 21.023Award Number and Year: 2021Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding: Significant Deficiency in Internal Controls over Compliance, Other MattersCriteria or specific requirement:Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v) Comply with the established accounting policies and practices of the non-Federal entity;(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish an 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 statues, regulations, and the terms and conditions of the Federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 2 of 60 time and effort certifications tested.Cause:The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.Effect:There is an increased risk of charging unallowed payroll costs to the program.Questioned Costs:$38Recommendation:The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-008Federal Agency: U.S. Department of TreasuryFederal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery FundsAssistance Listing Number: 21.027Award Number and Year: 2021Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding: Significant Deficiency in Internal Controls over Compliance, Other MattersCriteria or specific requirement:Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v) Comply with the established accounting policies and practices of the non-Federal entity;(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish an 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 statues, regulations, and the terms and conditions of the Federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 7 of 60 time and effort certifications tested.Cause:The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.Effect:There is an increased risk of charging unallowed payroll costs to the program.Questioned Costs:$465Recommendation:The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-005Federal Agency: U.S. Department of TreasuryFederal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery FundsAssistance Listing Number: 21.027Award Number and Year: 2021Compliance Requirement: ReportingType of Finding: Significant Deficiency in Internal Controls over Compliance, Other MattersCriteria or specific requirement:Compliance ? The Project and Expenditure Report is required to report on financial data, projects, funded, expenditures, and contracts and subawards over $50,000, and other information. These reports are required to be submitted by the last day of the month after the end of each quarter.Control ? Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:For 2 of the 2 reports tested, the report did not include amounts in the current period expenditures section. These reports were also not filed timely based on the date of submission at the bottom of the quarterly reports.Cause:The County did not have adequate controls to ensure supporting documentation, including documentation on timely submission was retained for all reports submitted.Effect:The County was not in compliance with the programs reporting requirements.Questioned Costs:UndeterminedRecommendation:We recommend that management review their policies and procedures to ensure that all monthly and quarterly reports are submitted timely, and the supporting documentation used to prepare the reports are retained for audit purposes.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-005Federal Agency: U.S. Department of TreasuryFederal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery FundsAssistance Listing Number: 21.027Award Number and Year: 2021Compliance Requirement: ReportingType of Finding: Significant Deficiency in Internal Controls over Compliance, Other MattersCriteria or specific requirement:Compliance ? The Project and Expenditure Report is required to report on financial data, projects, funded, expenditures, and contracts and subawards over $50,000, and other information. These reports are required to be submitted by the last day of the month after the end of each quarter.Control ? Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:For 2 of the 2 reports tested, the report did not include amounts in the current period expenditures section. These reports were also not filed timely based on the date of submission at the bottom of the quarterly reports.Cause:The County did not have adequate controls to ensure supporting documentation, including documentation on timely submission was retained for all reports submitted.Effect:The County was not in compliance with the programs reporting requirements.Questioned Costs:UndeterminedRecommendation:We recommend that management review their policies and procedures to ensure that all monthly and quarterly reports are submitted timely, and the supporting documentation used to prepare the reports are retained for audit purposes.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-008Federal Agency: U.S. Department of TreasuryFederal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery FundsAssistance Listing Number: 21.027Award Number and Year: 2021Compliance Requirement: Allowable Costs/Cost PrinciplesType of Finding: Significant Deficiency in Internal Controls over Compliance, Other MattersCriteria or specific requirement:Compliance - 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charge to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must:(i) Be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity;(iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities;(iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy;(v) Comply with the established accounting policies and practices of the non-Federal entity;(vi) Support the distribution of the employee's salary and wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.Control - Per 2 CDF 200.303(a), a non-Federal entity must: Establish an 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 statues, regulations, and the terms and conditions of the Federal awards. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Time and Effort Certifications were not documented in accordance with federal requirements. The County was unable to provide adequate support to validate actual payroll expenses charged to the federal program for 7 of 60 time and effort certifications tested.Cause:The County did not have adequate controls to ensure that time and effort reporting was performed in accordance with federal requirements.Effect:There is an increased risk of charging unallowed payroll costs to the program.Questioned Costs:$465Recommendation:The County should reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The County should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program.Views of Responsible Officials:See separate Correction Action Plan related to this finding.
Reference Number: 2022-001Federal Agency: U.S. Department of LaborU.S. Department of TreasuryU.S. Department of Health and Human ServicesFederal Program: WIOA ClusterCOVID-19-Coronavirus State and Local Fiscal Recovery FundsAging ClusterProjects for Assistance in Transition from Homelessness (PATH)Block Grants for Community Mental Health ServicesAssistance Listing Number: 17.258/17.259/17.278, 21.027, 93.044/93.045/93.053, 93.150, 93.958Pass-through Agency: Maryland Department of Labor, Maryland Department of Health Maryland Department of AgingPass-through Number: P26-BCO-PY22-A, P26-BCO-PY21-A, P06-BCO-FY20-A,P26-BCO-PY21-Y, P16-BCO-PY20-Y, P16-BCO-FY21-D,P16-BCO-PY20-D, P26-BCO-PY21-D, P16-BCO-FY21-DAAA-3-24-004, 2010MDSSC6-00, 2101MDCMC6,2101MDHDC6-00, ST-2505-004, MH184OTH, MH222OTHCompliance Requirement: Reporting: Schedule of Expenditures of Federal AwardsType of Finding: Significant Deficiency in Internal Control Over Compliance, Other MattersCriteria or specific requirement:Compliance: Per 2 CFR 200 Section 510(b), the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with Section 200.502. The schedule must list individual Federal programs by Federal agency and provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. It must also include the total amount provided to subrecipients from each Federal program. Per Section 502(g), Federal non-cash assistance, such as free rent, food commodities, donated property, or donated surplus property, must be valued at fair market value at the time of receipt or the assessed value provided by the Federal agency.Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Condition:Errors were detected in the Schedule of Expenditures of Federal Awards (SEFA). Errors included:? Under the WIOA Cluster, the County was unable to reconcile the amount reported on the draw downs to the amount reported in the general ledger to ensure expenditures were accurately reported on the SEFA.? The original SEFA underreported the Coronavirus State and Local Fiscal Recovery Funds grant by $1.2 million.? During our testing of payroll in the Aging Cluster, it was noted that 2 of 40 expenditures tested totaling $615 were incorrectly reported on the FY 2022 SEFA. They should have been reported on the FY 2021 SEFA.? Incorrect subrecipients expenditures were reported on the SEFA as follows:o Emergency Rental Assistance Program ? the amount of subrecipient expenditures were incorrectly reported.o Projects for Assistance in Transition from Homelessness (PATH) and Block Grant for Community Mental Health Services ? the subrecipient amount reported on the SEFA exceeded the total expenditures.Cause:Turnover in the grant accountant position resulted in other County staff completing the schedule of expenditures of federal awards, who were not involved in the grant process throughout the year.Effect:Federal expenditures were incorrectly reported on the SEFA , which were subsequently corrected.Questioned Costs:UndeterminedRecommendation:We recommend that the County improve its SEFA compilation process to ensure that program expenditures reported on the County?s SEFA are complete and accurate. Procedures and controls should include a process to identify programs that are new to the County and ensure they are properly reported on the SEFA.We further recommend that County?s Office of Budget and Finance (OBF) work with the County?s agencies and departments to review and update their SEFA review and confirmation procedures to ensure that expenditure information they submit to OBF is accurate, that it includes all programs expended, and ties to detail expenditure transactions in the County?s accounting system. They should also review and enhance procedures and controls to ensure that subrecipient payments are accurately reported.Views of Responsible Officials:See separate Correction Action Plan related to this finding.