Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.
Criteria: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per 2 CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: the County did not maintain documentation of a vendor’s suspension and debarment status. Cause: the County’s Procurement office was unaware of the suspension and debarment verification requirement for all federally funded procurements and subawards $25,000 or more. Questioned Costs: None Effect: Federal funds may be paid to parties that are ineligible to participate in a federal program. Recommendation: We recommend the County evaluate its policies procedures to ensure that suspension and debarment requirements are being met prior to entering into transactions with vendors. Identification of Repeat Finding: This is a first year finding. Views of Responsible Officials: management agrees with the finding.
Criteria: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Monitoring the activities of the subrecipients as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). Condition: the County did not provide documentation to support subrecipient monitoring for all subawards issued during fiscal year 2022. Cause: the County’s Finance Office was unaware of subrecipient monitoring requirements for all federally funded subawards of $25,000 or more. Questioned Costs: None Effect: Federal funds may be used for purposes that are not in accordance with the terms of the grant agreement. Recommendation: We recommend the County review and enhance internal controls and procedures to ensure that all subrecipients are monitored and reviewed. Identification of Repeat Finding: This is a first year finding. Views of Responsible Officials: management agrees with the finding.
Criteria: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: the County was unable to provide documentation to support review and approval of the eligibility determination and disbursement of benefits. Cause: the County’s procedures and controls were not sufficient to ensure that eligibility determination and benefit disbursements were properly reviewed and approved. Questioned Costs: None Effect: failure to review and approve eligibility of program participants may result in benefits being disbursed to ineligible participants. Recommendation: We recommend the County review and enhance internal controls and procedures to ensure that the review and approval of the eligibility of program participants is documented. Identification of Repeat Finding: This is a first year finding. Views of Responsible Officials: management agrees with the finding.
Criteria: Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: the County was unable to provide documentation to support review and approval of the monthly report required by the grantor. Cause: the County’s procedures and controls were not sufficient to ensure that reports were properly reviewed and approved before submission to the grantor. Questioned Costs: None Effect: failure to review and approve reports required by the grantor may result in erroneous reports being submitted to the grantor. Recommendation: We recommend the County review and enhance internal controls and procedures to ensure that the review and approval of the monthly report is documented. Identification of Repeat Finding: This is a first year finding. Views of Responsible Officials: management agrees with the finding.
2022-007 – Lack of Oversight Due of Management Turnover (SD) Federal Program Title: Section 8 Housing Choice Vouchers Assistance Listing Number: 14.871 Federal Agency: U.S. Department of Housing and Urban Development Category of Finding: Reporting/Special Tests and Provisions Criteria: Under 2 CFR §200.303 of the Uniform Guidance, non-federal entities are required to establish and maintain effective internal control over compliance, including appropriate oversight of federal programs to ensure compliance with applicable laws, regulations, and the terms and conditions of the federal awards. Effective internal controls rely on strong management oversight to ensure that compliance responsibilities are met, even during periods of organizational change. Condition: During the audit, it was noted that the entity experienced significant turnover in key management positions responsible for overseeing compliance with federal awards. As a result, there was insufficient oversight of federal programs and internal controls. Critical duties related to compliance monitoring, reporting, and financial management were not performed adequately during the transition period, and there was a lack of continuity in management practices. Cause: The entity did not have adequate processes in place to ensure continuity of oversight and management responsibilities during periods of turnover. There were no succession plans or interim measures to ensure that compliance duties were properly transitioned and maintained. Effect or Potential Effect: The lack of oversight during the management turnover period increases the risk of non-compliance with federal award requirements. It can lead to gaps in monitoring, failure to meet reporting deadlines, inaccurate financial management, and the potential for disallowed costs or other negative consequences. Questioned Cost: None. Context: The deficiency was found during our testing of reporting and special tests and provisions. Statistical Sampling Validity: Not applicable. No sampling was performed. Repeat of a Prior-Year Finding: No. Recommendation: The entity should establish policies and procedures to ensure continuity of oversight and compliance monitoring during management transitions. This should include: 1. Developing a formal succession plan for key management positions responsible for overseeing federal programs. 2. Implementing interim oversight measures, such as assigning temporary leadership or redistributing compliance responsibilities during periods of transition. 3. Ensuring that new management receives timely training on compliance responsibilities and internal controls related to federal awards. Management Response and Corrective Action Plan City's Response: The City concurs with the recommendation. Corrective Action Plan: The recommendations are included in the new grants policy. The City Manager shall review and approve it for implementation by March 2025. Planned Implementation Date: March 2025 Responsible Person(s): City Manager
Repeat finding of 2021-002 Federal Program: COVID-19: Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Assistance Listing Number: 93.498 Federal Agency: U.S. Department of Health and Human Services Award Number: N/A Award Year: 2021 Compliance Requirement: Reporting Questioned Costs: Not applicable Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which requires an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition and Context: The System did not complete the PRF Periods 2 and 3 reporting in accordance with the U.S. Department of Health and Human Services guidance. The System did not enter the correct amounts from its data supporting lost revenues for all quarters. We note that many of these amounts carried forward in the PRF reports from errors made in the PRF Period 1 reporting. The adjustments needed within the PRF reports to correct the errors noted for PRF Periods 2 and 3 are as follows: (1) lost revenues for the period of availability should decrease from $13,866,058 to $2,405,463 and (2) unused lost revenues should decrease from $12,493,140 to $1,032,545. Furthermore, errors in reporting total revenues by quarter led to errors in the allocation among payers by quarter. Effect: The amounts reported to Health Resources & Services Administration (HRSA) were not in accordance with established U.S. Department of Health and Human Services reporting guidance. Cause: Errors in the lost revenues presented in the Periods 2 and 3 report submissions were not detected by the Sytem's internal control process. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood and that information used in preparation of the reports is reviewed, with errors addressed, prior to reporting. Planned Corrective Actions and View of Responsible Officials: System management agrees with the finding and has updated its lost revenue calculation, with cumulative amounts through Period 6 reporting. While management did attempt to update its lost revenue amounts with filing of its Period 4 reports, additional data entry errors were made.
Identification of the Federal Program: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program Criteria: In accordance with 2 CFR Section 200.303, non-Federal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, in accordance with 2 CFR Section 200.403, costs must meet certain general criteria in order to be allowable under Federal awards. That criterion includes, but is not limited to, adequate documentation and be necessary and reasonable for the performance of the Federal award. Condition: During our audit of nonpayroll expenditures charged to the PRF Program, we noted that a total amount of $28,018 of professional service expenses was included twice in the total federal expenditures reported within the PRF Program. As such, the PRF Program’s total nonpayroll expenditures was overstated by $28,018 while the lost revenue claimed was understated by the same amount, wherein the net impact is zero. Cause: The Authority did not perform a thorough review of expenses charged to the program. Effect: The amounts reported to the Health Resources & Services Administration (HRSA) Provider Relief Fund Portal did not reflect the correct amounts within the nonpayroll expenditures and lost revenue for the PRF Program. However, the total amount claimed under PRF program was still correct. Questioned Costs: None. Context: The Authority inadvertently included professional service expenses of $28,018 twice within the nonpayroll expenditures rather than including the same amount under lost revenue. Repeat Finding: No. Recommendation: We recommend the Authority strengthen its policies, procedures and internal controls over the review of expenditures charged to the federal program. View of Responsible Officials: The Authority’s management agrees with the federal award finding identified in the audit. Management’s response to this finding is described in the accompanying management’s corrective action plan.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D210012 (Year: 2021) Questioned Costs: $189,893 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Elementary and Secondary School Emergency Relief Fund program. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $2,439,337 were expended and reported on the Dodge County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal Awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amounts of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity … (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 202.403 – Reasonable Costs state that “a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given costs, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The constraints or requirements imposed by such factors as: sound business practices; arm’s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award… (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. € Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award’s cost.” Furthermore, provisions included in the Uniform Guidance, Section 200.318 – General Procurement standards state that “the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations… for the acquisition of property or services required under a Federal award or subaward…” Moreover, to assist school districts in improving their financial management systems and associated compliance over federal programs, GaDOE published the Financial Management for Georgia Local Units of Administration (FMGLUA), manual. The FMGLUA manual requires that LEAs submit a budget as part of each federal program’s Consolidated Application process. The program budget reflects details regarding the manner in which each school district intends to expend the program funds. The Consolidated Application, including the budget, for each program must be reviewed and approved by GaDOE personnel before the LEA is authorized to expend program funds. Amendments to the budget are to be submitted to and approved by GaDOE when a school district intends to spend funds in a manner not initially reported. Lastly, LEA personnel must also provide for specific assurances related to the ESSER program within the Consolidated Application system. These assurances are reflected in the Uniform Guidance, Section 200.415 – Required Certifications, and include provisions that require LEAs “to assure that expenditures are proper and in accordance with the terms and conditions of the Federal award and approved project budgets…” Condition: Auditors performed a review of expenditure activity associated with the ESSER program to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were identified: • Testing revealed that expenditures totaling $173,893 were not appropriately approved by GaDOE through the Consolidated Application system. Further, the expenditures were not submitted for approval on an amended budget as of the end of audit fieldwork. • Testing revealed that a payment was made to the janitorial company utilized by the School District to provide “retention” bonuses to janitorial contractors who were not employees of the School District. These individuals were assigned to work within the School District by the private janitorial company. Per review of the contract in place during the fiscal year under review, it was noted that these bonuses represented amounts in excess of the agreed upon price. Furthermore, the School District does not have the authority or ability to retain these individuals as they were not employees of the School District and contract provisions requiring the individuals to remain employed by the janitorial company and in the service of the School District for a stated period of time was not reflected within the associated contract. Therefore, expenditures totaling $16,000 were not considered to be reasonable and necessary for the performance of the ESSER program and deemed unallowable. Questioned Costs: Known questioned costs of $189,893 were identified for expenditures that were not incurred for a necessary and reasonable purpose and did not follow the School District’s and/or GaDOE’s policies and procedures. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: In discussing these deficiencies with management, they stated that they believed that any expenditures not previously approved on the Consolidated Application were still allowable provided that budget amendments were submitted and approved by the GaDOE prior to the end of the grant period. Additionally, they stated that they were not aware that contract amendments should be initiated prior to expending funds in excess of the stated contract rates. Effect: The School District is not in compliance with the Uniform Guidance, ED, or GaDOE guidance related to the ESSER program. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are appropriately approved by the GaDOE through the Consolidated Application process and to ensure that expenditures are in line with provisions reflected in the associated contract and or/contract amendments, prior to the expending of federal program funds. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District's and GaDOE’s policies and procedures. Views of Responsible Officials: We concur with this finding.
Criteria: The Organization is required to establish and maintain effective internal controls over financial documentation to ensure compliance with federal regulations, as outlined in 2 CFR 200.303 and 2 CFR 200.334 of the Uniform Guidance. These controls are crucial for the accurate management and reporting of federal funds. Statement of Condition: During our audit, it was identified that the Organization could not locate invoices or check stubs for five out of sixty items tested for non-payroll expenses within a major federal program. Cause: The existing internal control processes related to the organization and retrieval of financial documentation appear to be insufficient, a situation that was exacerbated by staffing shortages during the period under audit. Addressing these challenges through enhanced processes and adequate staffing could improve the Organization's ability to provide timely and complete documentation. Effect or Potential Effect: The inability to produce essential financial documentation may lead to compliance challenges with federal funding requirements. Additionally, this increases the risk of questioned costs, which could have financial implications for the Organization if not rectified. Recommendation: It is recommended that the Organization implement enhanced procedures for the systematic maintenance and retrieval of all financial records related to expenditures. This should include staff training on these protocols to ensure compliance and improve overall internal controls. Management’s Response: Management agrees with this finding. Please refer to the Corrective Action Plan for further details.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Criteria: 2 CFR Part 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Section 200.512 of the Uniform Guidance states that the audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’sreport or nine months after the end of the audit period (whichever is earlier). Condition and Context: The Authority did not complete its audit report prior to the required deadline. Cause and Effect: Due to a delay in the compiling of records related to the audit, the Authority was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that the Authority complete its audits and submit the required reports by the deadline. Views of responsible officials of the auditee: Management agrees with the finding and the auditors’ recommendation. See Management’s full response in the Corrective Action Plan at the end of this report.
Finding 2022-012—Lack of Internal Controls and Noncompliance with Reporting Requirement – Emergency Rental Assistance Program (Repeat Finding 2021-010) FEDERAL AGENCY: U.S. Department of the Treasury ASSISTANCE LISTING NO: 21.023 FEDERAL PROGRAM NAME: Emergency Rental Assistance Program FEDERAL AWARD NUMBER: ERA0174, ERAE0225 FEDERAL AWARD YEAR: 2021 CONTROL CATEGORY: Reporting QUESTIONED COSTS: $0 Condition: While performing a test over the reporting requirement for the Emergency Rental Assistance Program (ERA), the following was noted: • July 2021 monthly report for ERA2 was not submitted. • December 2021 monthly report for ERA2 was not timely submitted. • First Quarter report (January 2022 – March 2022) for ERA2 was submitted late. In addition, the County was not consistent in the reporting of expenditures on the quarterly reports. The expenditures were originally reported when the County spent the funds. However, beginning in the fourth quarter of 2021, the County began reporting expenditures when the subrecipient spent the funds rather than when the County spent the funds. This resulted in the following: • Two (2) of the four (4) quarterly report expenditure amounts reported did not match the supporting documents provided by the County. • Three (3) of the four (4) quarterly reports reviewed had supporting documentation that did not reconcile to other supporting documentation submitted to the U.S. Department of the Treasury. Cause of Condition: Policies and procedures have not been designed and implemented to ensure the County complies with federal laws and regulations and grant agreements. Effect of Condition: This condition resulted in noncompliance with grant requirements. Recommendation: OSAI recommends the County comply with federal laws and regulations and grant agreements by submitting required reports to the U.S. Department of the Treasury timely. In addition, OSAI recommends the County design and implement a system of internal controls to ensure the accuracy and completeness of information submitted. Management Response: Chairman of the Board of County Commissioners: Beginning in October of 2021, the U.S. Department of the Treasury changed the ERA1 and ERA2 reporting requirements. In fact, each quarter of 2021 had various reporting changes. The County changed the manner of reporting which did result in difficulty in reconciling. Previous reports had several changes and had to be re-reconciled and amended. Therefore, it was determined to change to reporting when the sub-recipient spent, rather than the county. The County contacted the U.S. Department of the Treasury, who stated any, and all reports should be corrected in the next reporting cycle, rather than retrospectively. The County agrees that some of the prior County Clerk’s records were not in proper order. The County has a new Clerk in place as of July 1, 2024, and is working diligently to improve processes and procedures to prevent this from occurring again in the future. Cleveland County takes the auditor's findings seriously and has already implemented several improvements in documentation, monitoring, and reporting practices. Cleveland County is working toward improvements for fiscal year 2025 and has reconciled billing to align with the contract scope of work. However, we recognize the need for documented internal controls and are committed to addressing all recommendations to ensure compliance and transparency in future programs. The County appreciates the constructive feedback and will continue to refine its processes to better serve its citizens. Criteria: GAO Standards – Section 2 – Establishing an Effective Internal Control System – OV2.23 states in part: Objectives of an Entity – Compliance Objectives Management conducts activities in accordance with applicable laws and regulations. As part of specifying compliance objectives, the entity determines which laws and regulations apply to the entity. Management is expected to set objectives that incorporate these requirements. 2 CFR § 200.303(a) Internal Controls reads as follows: 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).
Finding 2022-005: Lack of Internal Control And Noncompliance With Activities Allowed or Unallowed; Allowable Costs/Cost Principles; and Period of Performance Federal Agency: Denali Commission Pass through agency: None Federal Programs: Biomass District Heating System Assistance Listing Number: 90.100 Award Number: 1672-00 Award Period: 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Condition and Context: The City did not maintain adequate documentation that costs and activities were allowed by the program or that the costs were incurred within the period of performance of the award. Criteria: All recipients of federal funds must comply with 2 CFR 200.303 – Internal Controls and 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. Additionally, 2 CFR Subpart E - Cost Principles establishes requirements that all recipients of Federal funds must follow when expending federal awards. Cause: Inadequate internal controls over expenditures. Effect: The City is not in compliance with the terms and conditions of the federal award and Uniform Guidance requirements. Questioned Costs: No known questioned costs. Repeat Finding: This is not a repeat finding, but is considered a systemic problem. Recommendation: The City should implement policies and procedures to ensure all expenditures have adequate supporting documentation, are not a prohibited cost or activity of a program, and are incurred within the award period of availability. Management Response: Management concurs with this finding. See Corrective Action Plan.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: $23,398 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Title I Grants to Local Educational Agencies program. Background: The Title I Grants to Local Educational Agencies (Title I) program was authorized under the Elementary and Secondary Education Act of 1965 to help local educational agencies (LEAs) improve teaching and learning in high-poverty schools in particular for children failing or most at-risk of failing, to meet challenging State academic standards. LEAs may operate targeted assistance programs in which children who are failing or most at-risk of failing may be served or schoolwide programs in which all children in eligible schools may be served. Title I funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Title I funds totaling $377,570 were expended and reported on the Talbot County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) 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…” Condition: Three individually significant non-personal services expenditures were selected for testing to determine if appropriate internal controls were implemented, and applicable compliance requirements were met. For one individually significant expenditure in the amount of $19,848, adequate supporting documentation in the form of an invoice was not maintained. Additionally, a sample of two employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. It was noted that timesheets were not maintained to evidence accuracy of amounts paid for $3,550 of additional pay. Questioned Costs: Upon testing individually significant expenditures, known questioned costs of $19,848 were identified for expenditures that were not supported by adequate documentation. These known questioned costs related to expenditures that were not tested as part of a sample and should not be projected to a population to determine likely questioned costs. Additionally, upon testing a sample of $99,999 in personal services expenditures, known questioned costs of $3,550 were identified for expenditures not supported by adequate documentation. Using the total personal services expenditures population of $200,603 (excluding benefits payments), we project the likely questioned costs to be approximately $7,121. Therefore, the known and likely questioned costs identified for all unallowable payments throughout the sample and individually significant items tested totaled $23,398 and $26,969, respectively. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the Title I program. Failure to ensure that documentation exists to support the allowability of payments from the Title I fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should review current internal control procedures related to Title I program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District’s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2022-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: $23,398 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Title I Grants to Local Educational Agencies program. Background: The Title I Grants to Local Educational Agencies (Title I) program was authorized under the Elementary and Secondary Education Act of 1965 to help local educational agencies (LEAs) improve teaching and learning in high-poverty schools in particular for children failing or most at-risk of failing, to meet challenging State academic standards. LEAs may operate targeted assistance programs in which children who are failing or most at-risk of failing may be served or schoolwide programs in which all children in eligible schools may be served. Title I funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Title I funds totaling $377,570 were expended and reported on the Talbot County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) 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…” Condition: Three individually significant non-personal services expenditures were selected for testing to determine if appropriate internal controls were implemented, and applicable compliance requirements were met. For one individually significant expenditure in the amount of $19,848, adequate supporting documentation in the form of an invoice was not maintained. Additionally, a sample of two employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. It was noted that timesheets were not maintained to evidence accuracy of amounts paid for $3,550 of additional pay. Questioned Costs: Upon testing individually significant expenditures, known questioned costs of $19,848 were identified for expenditures that were not supported by adequate documentation. These known questioned costs related to expenditures that were not tested as part of a sample and should not be projected to a population to determine likely questioned costs. Additionally, upon testing a sample of $99,999 in personal services expenditures, known questioned costs of $3,550 were identified for expenditures not supported by adequate documentation. Using the total personal services expenditures population of $200,603 (excluding benefits payments), we project the likely questioned costs to be approximately $7,121. Therefore, the known and likely questioned costs identified for all unallowable payments throughout the sample and individually significant items tested totaled $23,398 and $26,969, respectively. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the Title I program. Failure to ensure that documentation exists to support the allowability of payments from the Title I fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should review current internal control procedures related to Title I program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District’s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2022-002 Improve Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $58,415 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating to ensure that expenditures were appropriately documented to support allowability. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $611,712 were expended and reported on the Talbot County School District’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) 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 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Condition: A sample of seven non-personal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, three individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented, and applicable compliance requirements were met. The following deficiencies were noted: • A purchase order was not maintained for two of the expenditures. • The check amount, invoice, and purchase requisition form for one expenditure did not agree. • One expenditure was not appropriately approved by GaDOE through the Consolidated Application process. In addition, a sample of 15 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if appropriate internal controls were implemented, and applicable compliance requirements were met. The following deficiencies were noted: • Timesheets or other supporting documentation could not be provided for payments made to 14 employees. • Timesheets provided for six employees did not agree to amounts paid for the corresponding time period. Furthermore, upon completing testing over personal services expenditures for the Title I Grants to Local Educational Agencies (Title I) program, auditor noted that two employees were paid $2,870 from the ESSER fund that could not be supported by timesheets or other documentation. Questioned Costs: Upon testing a sample of $23,522 in non-personal service expenditures, known questioned costs of $9,424 were identified for expenditures not supported by adequate documentation or not properly approved through the Consolidated Application process. Using the total non-personal services expenditures population of $55,926, we project the likely questioned costs to be approximately $22,407. Additionally, upon testing a sample of $118,771 in personal services expenditures, known questioned costs of $46,121 were identified. Using the total personal services expenditure population of $298,264, we project the likely questioned costs to be approximately $115,821. Furthermore, known questioned costs of $2,870 were identified for unsupported ESSER payments upon completing personal services testing associated with the Title I program. Therefore, the known and likely questioned costs identified for unallowable payments totaled $58,415 and $138,228. The following Assistance Listing Number was affected by known and likely questioned costs: 84.425D. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the ESSER program. Failure to ensure that documentation exists to support the allowability of payments from the ESSER fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District’s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2022-002 Improve Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $58,415 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating to ensure that expenditures were appropriately documented to support allowability. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $611,712 were expended and reported on the Talbot County School District’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2022. Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) 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 FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Condition: A sample of seven non-personal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, three individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented, and applicable compliance requirements were met. The following deficiencies were noted: • A purchase order was not maintained for two of the expenditures. • The check amount, invoice, and purchase requisition form for one expenditure did not agree. • One expenditure was not appropriately approved by GaDOE through the Consolidated Application process. In addition, a sample of 15 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if appropriate internal controls were implemented, and applicable compliance requirements were met. The following deficiencies were noted: • Timesheets or other supporting documentation could not be provided for payments made to 14 employees. • Timesheets provided for six employees did not agree to amounts paid for the corresponding time period. Furthermore, upon completing testing over personal services expenditures for the Title I Grants to Local Educational Agencies (Title I) program, auditor noted that two employees were paid $2,870 from the ESSER fund that could not be supported by timesheets or other documentation. Questioned Costs: Upon testing a sample of $23,522 in non-personal service expenditures, known questioned costs of $9,424 were identified for expenditures not supported by adequate documentation or not properly approved through the Consolidated Application process. Using the total non-personal services expenditures population of $55,926, we project the likely questioned costs to be approximately $22,407. Additionally, upon testing a sample of $118,771 in personal services expenditures, known questioned costs of $46,121 were identified. Using the total personal services expenditure population of $298,264, we project the likely questioned costs to be approximately $115,821. Furthermore, known questioned costs of $2,870 were identified for unsupported ESSER payments upon completing personal services testing associated with the Title I program. Therefore, the known and likely questioned costs identified for unallowable payments totaled $58,415 and $138,228. The following Assistance Listing Number was affected by known and likely questioned costs: 84.425D. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the ESSER program. Failure to ensure that documentation exists to support the allowability of payments from the ESSER fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District’s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-003 Improve Controls over Cash Management Compliance Requirement: Cash Management Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 –Title I Grants to Local Educational Agencies Federal Award Numbers: SO10A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: None Identified Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: FA 2021-001, FA 2020-001, FA 2019-001, FA 2018-001, FA 2017-002, FA 2016-001, FA 2015-002, FA 2014-003 Description: The School District made cash drawdowns in excess of immediate cash needs for the Title I Grants to Local Educational Agencies and Elementary and Secondary School Emergency Relief Fund programs. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Background Information: The School District may request Title I Grants to Local Educational Agencies (Title I) and Elementary and Secondary School Emergency Relief (ESSER) Fund program funds from the Georgia Department of Education (GaDOE) once per month. GaDOE requires the School District to submit DE-0147 – Requests for Reimbursement of Monthly Cash Disbursements through the Grants Accounting Online Reporting System to receive program funds. When a DE-0147 request is submitted and approved, the funds are typically disbursed to the School District through an electronic payment process the next week. The School District submitted DE-0147 requests to receive a total of $390,112 in Title I funds and a total of $498,996 in ESSER funds from GaDOE during the fiscal year under review. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.305(b) state that “For non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds… the pass-through entity and the disbursement by the non-Federal entity.” In addition, the Uniform Guidance Section 200.302(b)(6) requires the entity to develop written cash management procedures. Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of all cash drawdowns and disbursements related to the Title I and ESSER programs was performed to determine if any excessive cash balances were maintained during the fiscal year under review. Cash balances in excess of program materiality were maintained for the Title I program for 365 days and the ESSER program for 121 days. Additionally, it was noted that the School District did not have appropriate internal controls in place over the cash drawdown process. Cause: In discussing this issue with the School District, they indicated that the lack of review of federal grants resulted in excess cash drawdown requests. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. In addition, the School District could potentially accrue an interest liability that would be owed back to the federal government. Furthermore, when the School District cannot meet the requirement to minimize the time elapsing between the transfer of funds and disbursement of those funds, provisions included in the Uniform Guidance allow GaDOE to change the method by which the School District is transferred funds and delay the School District’s receipt of these funds. This may include a requirement by GaDOE to submit invoices prior to being reimbursed for program expenditures. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Recommendation: The School District should establish procedures to accurately forecast the cash needs of the Title I and ESSER programs and minimize the time elapsing between the transfer of funds from GaDOE and the disbursement of such funds by the School District. In addition, these procedures should be documented in writing in accordance with the Uniform Guidance Section 200.302(b)(6). Furthermore, management should develop and implement a monitoring process to ensure that these procedures are followed. Views of Responsible Officials: We concur with this finding.
FA 2022-004 Strengthen Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Numbers: S010A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: $37,644 Repeat of Prior Year Findings: FA 2021-002, FA 2019-002 Description: The School District did not file accurate completion reports for the Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE web portal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must…be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, Provisions included in the Uniform Guidance Section 200.302(b)(2) state in part that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of the School District’s accounting records and the completion report related to the Title I-A, Improving Academic Achievement of the Disadvantaged program for the period ending September 30, 2022, revealed that the expenditures were over reported by $37,644. Questioned Cost: Questioned cost of $37,644 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: In discussing this deficiency with the School District, they stated these issues were a result of turnover within the Central Office. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District obtained more federal funding than they were eligible to receive. Additionally, this funding must be returned to GaDOE. Recommendation: The School District should establish internal control procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and DE-0147 reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
FA 2022-004 Strengthen Controls over Financial Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Number and Title: 84.010 – Title I Grants to Local Educational Agencies Federal Award Numbers: S010A200010 (Year: 2021), S010A210010-21A (Year: 2022) Questioned Costs: $37,644 Repeat of Prior Year Findings: FA 2021-002, FA 2019-002 Description: The School District did not file accurate completion reports for the Title I Grants to Local Educational Agencies program. Background Information: The Georgia Department of Education (GaDOE) requires the School District to submit a completion report by October 30 after the 15-month period of performance associated with the Title I Grants to Local Educational Agencies (Title I) program ends. These completion reports are filed through the Grants Application section of the MyGaDOE web portal and reflect budgeted and actual expenditure information for the Title I program for the reporting period. If the total expenditures reflected on the completion report are more than the Title I program funds received by the School District for the grant period, a DE-0147 – Request for Reimbursement of Monthly Cash Disbursements will be automatically generated and the additional funds due to the School District will be disbursed appropriately. Conversely, if the total funds received for the grant period exceed the total expenditures reflected on the completion report, the Grants Application will prompt the School District to enter a check number for the required refund of excess funds drawn down. Therefore, it is imperative that completion reports are filed by the School District in an accurate and timely manner. III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Criteria: As a recipient of federal awards, the Institution is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance Section 200.302(a) state in part that “the non-Federal entity’s financial management systems must…be sufficient to permit the preparation of reports required by general and program-specific terms and conditions.” In addition, Provisions included in the Uniform Guidance Section 200.302(b)(2) state in part that the non-Federal entity’s financial management systems must provide for “accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements.” Further, as noted in the Uniform Guidance Section 200.511, management is responsible for implementing reported corrective action to findings from previous audits. Condition: A review of the School District’s accounting records and the completion report related to the Title I-A, Improving Academic Achievement of the Disadvantaged program for the period ending September 30, 2022, revealed that the expenditures were over reported by $37,644. Questioned Cost: Questioned cost of $37,644 were identified for cash drawdowns in excess of reimbursable expenditures. Cause: In discussing this deficiency with the School District, they stated these issues were a result of turnover within the Central Office. Effect: The School District was not in compliance with the Uniform Guidance and GaDOE guidance. Failure to accurately report federal award expenditures through the completion report process could lead to the filing of DE-0147 reimbursement requests with GaDOE that do not support actual expenditures. Therefore, the School District obtained more federal funding than they were eligible to receive. Additionally, this funding must be returned to GaDOE. Recommendation: The School District should establish internal control procedures to ensure that completion reports submitted to GaDOE are supported by the accounting records and DE-0147 reimbursement requests are prepared based upon actual expenditures incurred. In addition, management should develop and implement a monitoring process to ensure that control procedures are being followed. Views of Responsible Officials: We concur with this finding.
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Federal Agency: U.S. Department of Health and Human Services Pass-Through Agency: Not applicable Award Number / Year: N/A / 2022 Criteria: Non-federal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the Federal award to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Recipients of Provider Relief Funds (PRF) payments must also comply with the reporting requirements described in the PRF terms and conditions and specified in directions issued by the U.S. Department of Health and Human Services. Condition/Context: The Center reported $659,718 of total other PRF expenses incurred in the period 2 submission which were categorized as Mortgage/Rent. However, the expenses incurred in this category were not determined to be eligible expenses under the terms and conditions of 2 CFR 200.303(a). The Center also submitted the period 2 report past the reporting deadline. Effect: The amounts reported to Health Resources & Services Administration (HRSA) did not have the necessary supporting documentation that was used to prepare and submit the initial reporting. Questioned Costs: None Cause: The Center misinterpreted the definitions of eligible expenses that should be included in the submission. Recommendation: We recommend that management implement procedures to ensure that the most recent guidance is reviewed and understood, and that information used in preparation of the reports are reviewed, with errors addressed and maintained prior to reporting. Management’s Response: Management agrees with the finding and has subsequently supported other eligible expenses that were not included in the original submission. These amounts exceeded the funding received.
Allowable Costs U.S. Department of Health and Human Services Community Service Block Grant – ALN #93.569 Criterion:Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal Award.Costs must be necessary and reasonable for the performance of the Federal Award and allowable thereto under the principles in 2 CFR part 200, subpart E. Condition:Based upon our test work, we noted that the Time and Attendance Reports had no evidence of management approval for 47 out of a sample of 60 payroll expenditures charged to the CSBG program. In addition, 10 out of the 12 staff members whose wages were charged to the CSBG program did not have an annual Performance Appraisal completed.Cause and Effect:Management has processes in place to ensure that effective internal controls related to payroll costs charged to the federal program are properly implemented. The Organization’s documented policies and procedures (“Accounting Policies and Procedures Manual”, and “Human Resources Policies and Procedures Manual”) contains effective internal controls that were not utilized. Therefore, payroll costs charged to the federal program were not properly approved by management in accordance with 2 CFR part 200, subpart D & E.Questioned Cost:None. Recommendation:We recommend that management enforce their documented policies and procedures to ensure that payroll costs are properly approved.View of Responsible Officials:The Organization agrees with this finding and has developed a corrective action plan to address.
Allowable Costs U.S. Department of Health and Human Services Community Service Block Grant – ALN #93.569 Criterion:Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal Award.Costs must be necessary and reasonable for the performance of the Federal Award and allowable thereto under the principles in 2 CFR part 200, subpart E. Condition:Based upon our test work, we noted that the Time and Attendance Reports had no evidence of management approval for 47 out of a sample of 60 payroll expenditures charged to the CSBG program. In addition, 10 out of the 12 staff members whose wages were charged to the CSBG program did not have an annual Performance Appraisal completed.Cause and Effect:Management has processes in place to ensure that effective internal controls related to payroll costs charged to the federal program are properly implemented. The Organization’s documented policies and procedures (“Accounting Policies and Procedures Manual”, and “Human Resources Policies and Procedures Manual”) contains effective internal controls that were not utilized. Therefore, payroll costs charged to the federal program were not properly approved by management in accordance with 2 CFR part 200, subpart D & E.Questioned Cost:None. Recommendation:We recommend that management enforce their documented policies and procedures to ensure that payroll costs are properly approved.View of Responsible Officials:The Organization agrees with this finding and has developed a corrective action plan to address.
Allowable Costs U.S. Department of Health and Human Services Community Service Block Grant – ALN #93.569 Criterion:Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal Award.Costs must be necessary and reasonable for the performance of the Federal Award and allowable thereto under the principles in 2 CFR part 200, subpart E. Condition:Based upon our test work, we noted that the Time and Attendance Reports had no evidence of management approval for 47 out of a sample of 60 payroll expenditures charged to the CSBG program. In addition, 10 out of the 12 staff members whose wages were charged to the CSBG program did not have an annual Performance Appraisal completed.Cause and Effect:Management has processes in place to ensure that effective internal controls related to payroll costs charged to the federal program are properly implemented. The Organization’s documented policies and procedures (“Accounting Policies and Procedures Manual”, and “Human Resources Policies and Procedures Manual”) contains effective internal controls that were not utilized. Therefore, payroll costs charged to the federal program were not properly approved by management in accordance with 2 CFR part 200, subpart D & E.Questioned Cost:None. Recommendation:We recommend that management enforce their documented policies and procedures to ensure that payroll costs are properly approved.View of Responsible Officials:The Organization agrees with this finding and has developed a corrective action plan to address.
Eligibility U.S. Department of Health and Human Services Community Service Block Grant – ALN #93.569Criterion:Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal Award.The Organization is responsible for ensuring that a participant is eligible to receive services under the CSBG program. The Organization requires management review of participant files to ensure that eligibility procedures have been performed during the intake process to ensure each participant is eligible. Condition:During our review of 25 eligible participant files, 18 out of 25 participant files did not contain evidence of management review prior to CSBG program benefits being provided.Cause and Effect:Management has a process in place to ensure that effective internal controls related to CSBG Eligibility requirements are properly implemented. The internal controls the Organization has in place for the CSBG eligibility determination process were not utilized. Therefore, intake forms and other relevant documentation within CSBG participant files were not properly approved by management in accordance with 2 CFR part 200, subpart D. Recommendation: We recommend that management enhance the design of its control activities to ensure that CSBG participant files are adequately maintained, and strengthen controls surrounding management review of participant files during the intake process to ensure individuals receiving services are eligible for benefits.View of Responsible Officials:The Organization agrees with this finding and has developed a corrective action plan to address.