Federal Agency: U.S. Department of Agriculture Federal Program Name: Child and Adult Care Food Program Assistance Listing Number: 10.558 Pass-Through Agency: Feeding Our Future Award Period: February 2021 – December 2021 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Adverse Opinion) Criteria or specific requirement: 2 CFR section 200.303(a) requires that nonfederal 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. MDE also issued At-Risk Afterschool Care Centers Guidance for School Year 2021-22 which indicated that CACFP at-risk meals can only be claimed for reimbursement on days when an afterschool program is provided. As an example, the guidance indicated that a 7-day meals bundle would not be an allowable use of the flexibilities if the afterschool care program is only provided for 2 days a week. Additionally, in that same memo, MDE indicated that it was expected that USDA expects that CACFR operators follow the lead of schools to discontinue use of noncongregate meal waivers once it is safe for children to return to school in each community. Condition: The Organization purchased meals from a vendor that delivered meals to homes of participating children. There was not documentation of delivery of meals, such as delivery logs, schedule of deliveries, etc. to support the number of meals actually delivered, but rather an invoice showing the total meal number. Meals on the provided invoices included seven day meal bundles which were also not allowed under the program guidance as the afterschool programs were not provided all seven days. In addition, the site application submitted by the sponsor organization indicated that meals were served on site, when they were not. Schools resumed in-person learning in September of 2021, but noncongregate meals were provided by the Organization from September-December of 2021 instead of on-site congregate meals. Questioned costs: Reimbursed meals for 2021 totaled $2,736,462, which did not contain evidence of delivery of meals by the vendor. Context: Between February-December of 2021, the Organization was reimbursed by its sponsor organization for approximately 574,000 meals, totaling $2,736,462, which consisted of seven day meal bundles delivered by the vendor. There was no supporting documentation related to delivery of meals by the vendor, other than a weekly invoice indicating the number of meals. The contract with the vendor also did not specify delivery arrangements, pricing, or other relevant details. Meal bundles containing seven days of a supper/snack were provided which was also not allowed. Cause: The Organization’s management indicated it was not told by the sponsor organization to maintain documentation supporting delivery of meals; management also indicated they did not receive guidance from their sponsor on seven day meal bundles not being allowed, or discontinuance of noncongregate meals in the fall of 2021. Effect: A lack of sufficient documentation exists related to the delivery of meals. Meals and snacks were reimbursed to the Organization from federal funds related to meals and snacks provided on days that were not allowable. Recommendation: We recommend the Organization attend training, review federal requirements, and fully understand the documentation and meal requirements of the program if they apply for funding with this program again. Views of responsible officials: This program was initiated during the height of COVID, when guidelines on both state and federal levels were changing rapidly. Management provided auditors with documentation for participation in the meal program. Documentation included participant names that were printed and/or written in cursive as is customary for the served population. The printed names were not considered signatures and rejected by the auditors. Management attended all trainings provided by the sponsor organization and followed all of the program sponsor guidelines. See the Corrective Action Plan for further details.
Federal Agency: U.S. Department of Agriculture Federal Program Name: Child and Adult Care Food Program Assistance Listing Number: 10.558 Pass-Through Agency: Feeding Our Future Award Period: February 2021 – December 2021 Type of Finding: • Material Weakness in Internal Control over Compliance Criteria or specific requirement: 2 CFR section 200.303(a) requires that nonfederal 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. Condition: Each month, the Organization provided a packet to the sponsor organization, Feeding Our Future, which contained detailed meal count sheets with names and ages of children receiving meals and days received, Clicker Reports summarizing the meal counts, and invoices from the vendor. Meal count sheets in many cases were not specifically labeled as to the month they related to, but management indicated they were part of the monthly submission. In our review of the packets we noted numerous discrepancies between the meal count sheets and Clicker reports. Meal count sheets for the year were higher than Clicker reports by approximately 43,000 meals. Questioned costs: None Context: We tested all monthly submissions for the St. Paul site from March-June and all monthly submissions for the St. Paul and St. Cloud sites from September-December, noting variances every month. Cause: Management indicated that discrepancies between meal count sheets and Clicker reports were due to items returned to the vendor by families. There was no documentation of returned items, and reports were adjusted based on phone conversations with the vendor. Effect: Clicker reports submitted for reimbursement are not in agreement with supporting documentation. There are no questioned costs related to this, since the Clicker reports were used for reimbursement and were lower than the meal count sheets. UpRecommendation: We recommend the Organization retain clear documentation of meal count sheets, including labeling of the particular month they relate to. We also recommend the Organization reconcile the meal count sheets with the clicker reports, and retain specific documentation as to the variances. Views of responsible officials: This program was initiated during the height of COVID, when guidelines on both state and federal levels were changing rapidly. Management provided auditors with documentation that had been approved by the sponsor organization. Management performed all activities requested by the sponsor organization and followed all the program sponsor guidelines. See the Corrective Action Plan for further details.
21.027 - U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Criteria: Section 200.303 of the Uniform Guidance requires documented non-federal entities to establish and maintain effective internal control over federal awards. Condition: Proper internal controls have not been documented or formally adopted. Context: As part of our testing, we requested documentation of Church at the Park's approval of expenditures. Cause: Church at the Park was not aware of the requirement for documented approval procedures. Effect: Church at the Park did not comply with the Uniform Guidance. Questioned Costs: None Repeat Finding: No Recommendation: We recommend Church at the Park document and adopt formal internal controls that encompass the requirements in 2 CFR 200 of the Code of Federal Regulations. Response: Church at the Park has written and adopted formal policies of internal control.
Assistance Listing Number, Federal Agency, and Program Name - 93.498, U.S. Department of Health and Human Services, COVID-19: Provider Relief Fund Finding Type - Material weakness Repeat Finding - No Criteria - According to 2 CFR § 200.303, HealthSource must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition - HealthSource does not have a review process in place related to the Covid expense spreadsheet and lost revenue calculation used to input expenses into the required reporting submissions to the U.S. Department of Health and Human Services for the Provider Relief Fund program. HeathSource also did not have a review process in place for the required submissions. Questioned Costs - None Context - There was no independent review completed on the Covid expense spreadsheet, lost revenue calculation, or the reporting submission to evaluate the completeness and accuracy of the submission. Cause and Effect - The lack of an independent review of the Covid expense spreadsheet and the reporting submission could result in an increased risk of incomplete or inaccurate information included in the reporting submission. Recommendation - HealthSource should implement a process to ensure an independent review of the reporting submission and the documents used to input information into the reporting submission, such as the Covid expense spreadsheet, is completed prior to finalization. Views of Responsible Officials and Corrective Action Plan - Management agrees with the finding and will implement a process to ensure an independent review of the reporting submission and its supporting documents is completed prior to finalization.
Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 TIN #736264482 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority did not have internal controls established over the federal award to ensure the federal award has been managed in compliance with federal and states, regulations, and conditions of the federal award. Cause: The Authority's federal award tracking over eligible expenditures, including lost revenues, and reporting to the Department of Health and Human Services (HHS) was performed by a management team that is no longer employed at the Authority. Adequate records were not maintained by that team to support the amounts reported, or internal controls over the program. This includes the identification of eligible expenditures, consideration of amounts reimbursed from another source, calculation of lost revenues, and tracking of information reported to HHS. The information needed to be regenerated, reviewed, and approved by current management in order to provide supporting information associated with this program. Effect: There is a potential risk that amounts claimed for the federal award are not allowable, not supported, or were reimbursed by another source. There is also a risk of error associated with calculations of eligible expenditures, including lost revenues, and reporting to HHS. These errors could result in noncompliance with the federal program and potentially questioned costs. Ultimately, management's report of eligible expenditures, after consideration of reimbursement from another source, exceeded the amounts reported to HHS. Questioned Costs: None Context: While sampling was used to test compliance with the major federal program, there was no evidence of internal controls with this program, and this was determined prior to any detail testing. Repeat Finding from Prior Years: No Recommendation: We recommend management develop and implement internal controls over federal award programs. The internal controls should provide assurance that the Authority is managing the federal award in conjunction with federal statutes, regulations, and conditions of the federal award. Additionally, the internal controls should include documentation and data retention provisions so that adequate information is available to support compliance with the federal award as well as internal controls being effective and operational. Views of Responsible Officials: Management agrees with the finding.
Finding 2021-003: Material weakness due to a lack of segregation of duties and effective internal controls Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Corona Virus Relief Fund Assistance Listing Numbers (ALN): 21.023 and 21.019 Federal Award Years: Year ended December 31, 2023 Pass-through Grantor and identifying numbers: Pierce County; SC-108112, SC-108282, SC-108719, SC- 108080 Criteria: 2 CFR 200.303(a) requires that “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).” Condition and Context: Helping Hand House has a lack of segregation of duties and internal controls when it comes to the processes related to the requirements of activities allowed, allowable costs / cost principles, period of performance, and reporting. Through the samples related to testing internal controls, we identified the following: 14 out of 60 selections for ALN 21.023 and 17 out of 60 selections for ALN 21.019 lacked sufficient evidence of approval of disbursements of rental assistance. 46 out of 60 selections for ALN 21.023 and 40 out of 60 selections for ALN 21.019 in which the same person was involved in preparing the underlying support for expenditures, approving them, and also reviewing and approving the invoices remitted to the Pass-through Grantor for reimbursements. This is a condition identified using a statistically valid sample. Cause: Management also failed to implement proper segregation of duties and internal controls related to the activities surrounding the administration of the federal award programs. Effect: The lack of segregation of duties related to these areas heightens the risk of potential errors and even fraud as it relates to ensuring that the expenditures are appropriate for the award and appropriately remitted for reimbursement. This also weakens the Organization’s ability to ensure compliance with the awards’ requirements. Question Costs: None Repeat Finding: Not applicable. Recommendation: We recommend that Helping Hand House establish written policies and procedures related to the programs stating explicit roles of each individual involved in the process. We also recommend that management conduct regular risk assessments and conduct monitoring functions over the internal controls to ensure that they are effectively working and appropriately documented. Views of Responsible Officials: See Corrective Action Plan.
Finding 2021-003: Material weakness due to a lack of segregation of duties and effective internal controls Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Corona Virus Relief Fund Assistance Listing Numbers (ALN): 21.023 and 21.019 Federal Award Years: Year ended December 31, 2023 Pass-through Grantor and identifying numbers: Pierce County; SC-108112, SC-108282, SC-108719, SC- 108080 Criteria: 2 CFR 200.303(a) requires that “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).” Condition and Context: Helping Hand House has a lack of segregation of duties and internal controls when it comes to the processes related to the requirements of activities allowed, allowable costs / cost principles, period of performance, and reporting. Through the samples related to testing internal controls, we identified the following: 14 out of 60 selections for ALN 21.023 and 17 out of 60 selections for ALN 21.019 lacked sufficient evidence of approval of disbursements of rental assistance. 46 out of 60 selections for ALN 21.023 and 40 out of 60 selections for ALN 21.019 in which the same person was involved in preparing the underlying support for expenditures, approving them, and also reviewing and approving the invoices remitted to the Pass-through Grantor for reimbursements. This is a condition identified using a statistically valid sample. Cause: Management also failed to implement proper segregation of duties and internal controls related to the activities surrounding the administration of the federal award programs. Effect: The lack of segregation of duties related to these areas heightens the risk of potential errors and even fraud as it relates to ensuring that the expenditures are appropriate for the award and appropriately remitted for reimbursement. This also weakens the Organization’s ability to ensure compliance with the awards’ requirements. Question Costs: None Repeat Finding: Not applicable. Recommendation: We recommend that Helping Hand House establish written policies and procedures related to the programs stating explicit roles of each individual involved in the process. We also recommend that management conduct regular risk assessments and conduct monitoring functions over the internal controls to ensure that they are effectively working and appropriately documented. Views of Responsible Officials: See Corrective Action Plan.
Finding 2021-003: Material weakness due to a lack of segregation of duties and effective internal controls Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Corona Virus Relief Fund Assistance Listing Numbers (ALN): 21.023 and 21.019 Federal Award Years: Year ended December 31, 2023 Pass-through Grantor and identifying numbers: Pierce County; SC-108112, SC-108282, SC-108719, SC- 108080 Criteria: 2 CFR 200.303(a) requires that “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).” Condition and Context: Helping Hand House has a lack of segregation of duties and internal controls when it comes to the processes related to the requirements of activities allowed, allowable costs / cost principles, period of performance, and reporting. Through the samples related to testing internal controls, we identified the following: 14 out of 60 selections for ALN 21.023 and 17 out of 60 selections for ALN 21.019 lacked sufficient evidence of approval of disbursements of rental assistance. 46 out of 60 selections for ALN 21.023 and 40 out of 60 selections for ALN 21.019 in which the same person was involved in preparing the underlying support for expenditures, approving them, and also reviewing and approving the invoices remitted to the Pass-through Grantor for reimbursements. This is a condition identified using a statistically valid sample. Cause: Management also failed to implement proper segregation of duties and internal controls related to the activities surrounding the administration of the federal award programs. Effect: The lack of segregation of duties related to these areas heightens the risk of potential errors and even fraud as it relates to ensuring that the expenditures are appropriate for the award and appropriately remitted for reimbursement. This also weakens the Organization’s ability to ensure compliance with the awards’ requirements. Question Costs: None Repeat Finding: Not applicable. Recommendation: We recommend that Helping Hand House establish written policies and procedures related to the programs stating explicit roles of each individual involved in the process. We also recommend that management conduct regular risk assessments and conduct monitoring functions over the internal controls to ensure that they are effectively working and appropriately documented. Views of Responsible Officials: See Corrective Action Plan.
Finding 2021-003: Material weakness due to a lack of segregation of duties and effective internal controls Federal Agency: U.S. Department of Treasury Program Title: Emergency Rental Assistance Program and Corona Virus Relief Fund Assistance Listing Numbers (ALN): 21.023 and 21.019 Federal Award Years: Year ended December 31, 2023 Pass-through Grantor and identifying numbers: Pierce County; SC-108112, SC-108282, SC-108719, SC- 108080 Criteria: 2 CFR 200.303(a) requires that “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).” Condition and Context: Helping Hand House has a lack of segregation of duties and internal controls when it comes to the processes related to the requirements of activities allowed, allowable costs / cost principles, period of performance, and reporting. Through the samples related to testing internal controls, we identified the following: 14 out of 60 selections for ALN 21.023 and 17 out of 60 selections for ALN 21.019 lacked sufficient evidence of approval of disbursements of rental assistance. 46 out of 60 selections for ALN 21.023 and 40 out of 60 selections for ALN 21.019 in which the same person was involved in preparing the underlying support for expenditures, approving them, and also reviewing and approving the invoices remitted to the Pass-through Grantor for reimbursements. This is a condition identified using a statistically valid sample. Cause: Management also failed to implement proper segregation of duties and internal controls related to the activities surrounding the administration of the federal award programs. Effect: The lack of segregation of duties related to these areas heightens the risk of potential errors and even fraud as it relates to ensuring that the expenditures are appropriate for the award and appropriately remitted for reimbursement. This also weakens the Organization’s ability to ensure compliance with the awards’ requirements. Question Costs: None Repeat Finding: Not applicable. Recommendation: We recommend that Helping Hand House establish written policies and procedures related to the programs stating explicit roles of each individual involved in the process. We also recommend that management conduct regular risk assessments and conduct monitoring functions over the internal controls to ensure that they are effectively working and appropriately documented. Views of Responsible Officials: See Corrective Action Plan.
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
Federal Program U.S. Department of Housing and Urban Development AL #14.871 – Material Weakness Criteria The Authority is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition We reconciled the SEFA and noted that the Authority did not have sufficient expenditures to cover COVID funds. It was noted the program funds were used incorrectly across other programs within the Authority. Questioned Costs $52,450 Context We reconciled the SEFA, noting there were not sufficient expenditures within the HCV fund to cover COVID funds. Effect The control deficiency led to the Authority receiving more COVID funds than what they were entitled to receive. Cause We note a lack of understanding of grant requirements by management of the Authority. Repeat Finding Not a repeat finding. Recommendation We recommend that management reviews grant requirements to ensure they have proper expenditures to cover funds received in the future. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
Finding 2021-009 Program: Office for Coastal Management Federal Financial Assistance Listing: 11.473 Federal Grantor: U.S. Department of Commerce Passed-through: National Fish and Wildlife Foundation Award No. and Year: 0318.19.070225 (2020) Compliance Requirements: Subrecipient Monitoring and Matching Type of Finding: Material Non-Compliance/Material Weakness Criteria: 2 CFR 200.303(a) - establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 200.331(b) - Requirements for Pass-Through Entities, states that all pass-through entities must assess the subrecipient’s risk of non-compliance with federal statutes, regulations, and terms and conditions of the subaward. 2 CFR 200.331(d) - establishes that the auditee must follow up and ensure subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided from the Pass Through Entity (PTE) detected through audits. 2 CFR 200.332(d) - establishes that the auditee must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. As part of monitoring the subrecipients, since there is a matching requirement within the grant, the CFSC’s procedures should monitor and ensure the subrecipients are complying the required match arrangements outlined in the subaward agreements. Condition: CFSC did not perform risk assessment for all subrecipients selected for testing. CFSC was unable to provide supporting documentation to show that they inquired with the subrecipients about any audits they had undergone or evidence that CFSC received and reviewed audit reports to ensure timely follow ups were made if any findings pertaining to the Federal Award was noted. Monitoring of matching is not done each time expenditures are incurred by a subrecipient, which increases the risk that a subrecipient may not incur the required match costs before the end of the grant period. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: Sampling was not used. We selected all three subrecipients for testing. The condition noted above was identified during our procedures over CFSC’s subrecipient monitoring provisions. Repeat Finding from Prior Year: Yes –2020-001 Effect: CFSC did not perform the following, which increases the risk of noncompliance: • Required risk assessments for the subrecipients, • Review subrecipient audit reports to ensure compliance with Federal Awards or make any necessary follow-ups pertaining to any findings noted, if any. • Ensure match expenditures are incurred throughout the duration of the grant period, which increases risk that CFSC may not meet its matching requirements through its subrecipients. Cause: CFSC’s procedures did not consistently ensure that the required risk assessments, monitoring, matching through subrecipients, or subrecipient follow-up were performed. Recommendation: We recommend that CFSC modify and strengthen its current policies and procedures to ensure that all required risk assessments are performed in accordance with the criteria outlined above. Views of Responsible Officials and Planned Corrective Actions: See Separate Corrective Action Plan.
III. Section III – Federal Award Findings and Questioned Costs Finding 2021-001 – Internal Control over Reporting (Significant Deficiency) Federal agency: U.S. Department of Health and Human Services Federal program title: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution AL Number: 93.498 Award Period: Period 1 and 2 Reporting (Period of availability January 1, 2020 – December 31, 2021) Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: According to §200.303 Internal Controls of 2 CFR Part 200, the nonfederal entity’s financial management systems, including records documenting compliance with Federal Statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions. Further, the financial management system of each non-federal entity must provide accurate, current, and complete disclosure of the financial results of each federal award or program, in accordance with the reporting requirements. Condition/Context: It was noted that the Other Provider Relief Fund (PRF) Expenses section was completed for the by-period program report, however the amounts did not agree to the final expenditure support. The final expenditure support exceeded the direct expenditures reported in the Other PRF Expenses and Unreimbursed Expenses Attributable to Coronavirus sections of the reports. In addition, the classification of the expenses by category and between periods per the final support did not match the period 1 and 2 reports. Questioned costs: None noted. Cause: Evolving guidance contributed to the condition. Management was diligent about segregating funding and expenditures for COVID-19 funding in total, but that approach made reporting for individual programs more difficult. Effect: The District did not accurately complete the program reporting as noted in the condition; however, the final support compiled for Other PRF Expenses exceeded the amounts reported in total for period 1 and 2 by $3.4 million. In addition, there was a total of $35 million of lost revenue in addition to the Other PRF Expenses. PRF was only applied to $6.5 million, which left unused lost revenue of $28.5 million at the end of period 2. Due to the condition noted above, the exact PRF that should have been applied to lost revenue in period 1 and 2 is not certain; however, there were no related questioned costs as there were unused lost revenues and supported Other PRF Expenses totaling $32 million. Repeat Finding: This is not a repeat finding. Recommendation: If the District continues to accept grant funding, we recommend that they create a process to ensure that expenditures are segregated by funding sources at the beginning of the grant period and the plan for individual program reporting requirement compliance is established and monitored. Views of Responsible Officials: The District believed they were following the reporting requirements at the time of submission based on the guidance available. After the submission they went through the process to segregate the PRF support more completely from other COVID-19 funding. While the classifications and PRF applied to Other PRF Expenses versus lost revenues within the program reports would have changed based on that process, in total amounts in excess of program expenditures for both periods were supported.
Federal Assistance Listing/CFDA #93.498 COVID‐19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 TIN # 730570773 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Authority did not have internal controls established over the federal award to ensure the federal award has been managed in compliance with federal states, regulations and conditions of the federal award. Cause: The Authority's federal award tracking over eligible expenditures, including lost revenues, and reporting to the Department of Health and Human Services (HHS) was performed by a management team that is no longer employed at the Authority. Adequate records were not maintained by that team to support the amounts reported, or internal controls over the program. This includes the identification of eligible expenditures, consideration of amounts reimbursed from another source, calculation of lost revenues, and tracking of information reported to HHS. The information needed to be regenerated, reviewed, and approved by current management in order to provide supporting information associated with this program. Effect: There is a potential risk that amounts claimed for the federal award are not allowable, not supported, or were reimbursed by another source. There is also a risk of error associated with calculations of eligible expenditures, including lost revenues, and reporting to HHS. These errors could result in noncompliance with the federal program and potentially questioned costs. Ultimately, management's report of eligible expenditures, after consideration of reimbursement from another source, exceeded the amounts reported to HHS. Questioned Costs: None Context: While sampling was used to test compliance with the major federal program, there was no evidence of internal controls with this program and this was determined prior to any detail testing. Repeat Finding from Prior Years: No Recommendation: We recommend management develop and implement internal controls over federal award programs. The internal controls should provide assurance that the Authority is managing the federal award in conjunction with federal statutes, regulations, and conditions of the federal award. Additionally, the internal controls should include documentation and data retention provisions so that adequate information is available to support compliance with the federal award as well as internal controls being effective and operational. Views of Responsible Officials: Management agrees with the finding.
Finding No. 2021-002 - Reporting Federal Program Assistance Listing 21.019 – Coronavirus Relief Fund – COVID - 19 Name of Federal Agency U.S. Department of Treasury Pass-through entity Puerto Rico Treasury Department Category Significant deficiency in internal controls over compliance / Non-compliance Compliance requirements ReportingCriteria As stated in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), § 200.303 Internal controls, “the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards.” In addition, the grant agreement establishes in its Exhibit A of the AAFAF guidelines, Grant Plan, Reporting, the following: “By the 15th day of each month, the Grantee will submit a Use of Funds Grant Report for the prior month’s expenses. The financial report will provide a detailed explanation of how the Grant funds were spent.”Condition During our test, we identified that the Use of Funds Grant Reports that were required to be submitted by the 15th day of the following month, were submitted late, as follows:Cause The grantee did not perform effective monitoring for the compliance with the deadlines of submission and also, did not have adequate internal controls for the recordkeeping of submissions. Effect The Hospital did not submit, or did not submit on time, the financial reports that provide a detailed explanation of how the grant funds were spent and the timing of the expenditures. The analysis, evaluations, and decision-making of the grantee could be affected. Questioned cost None.Context As part of the reporting (timing) test, we examined ten (10) submission dates required, which represent the 100% of submissions required for the year for the Coronavirus Relief Fund and observed that ten (10) of the Use of Funds Grant Reports, or 100% of the required reports, were submitted after their respective due dates. Identification of a repeat finding Yes, this is a repeated finding from the immediate previous audit, finding No. 2020-002. Views of responsible officials and planned corrective actions The Hospital’s management and responsible officers agree with this finding. Please refer to the corrective action plan section for the Hospital’s response on pages 55-56.
FINDING 2021-002 – Reporting, Non-compliance (Material Weakness) Federal program: U.S. Department of Health and Human Services – ALN 93.498, COVID-19 Provider Relief Fund (PRF) 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. Specific criteria are established by the U.S. Department of Health and Human Services (HHS) with respect to allowable cost and reporting requirements for this program, including: Funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Entities may elect to calculate, and report lost revenue using one of three options. Entities electing to calculate lost revenue using Option i report net revenue from patient care for each quarter and each year 2019, 2020, and 2021. For entities electing to report lost revenues using Option ii, the difference between budgeted and actual patient care revenues, budgets must be approved before March 27, 2020 and cover each quarter during the period of availability. Entities electing to calculate lost revenues using another reasonable method should report using option iii. Section 200.507 of the Uniform Guidance states that the program-specific audit shall be completed, and reporting required submitted within the earlier of 30 calendar days after receipt of the auditors’ report, or nine months after the end of the audit, unless a longer period is specified in a program_x0002_specific audit guide. Condition and Context: Internal controls surrounding the review process performed were not effective in detecting and correcting the proper reporting prior to submission. In the Hospital’s Period 1 reporting in the PRF reporting portal, the Hospital entered Total Other PRF Expenses of $2,072,205. Instead of then listing total other Coronavirus expenses that were not reimbursed by HRSA in the “Total Unreimbursed Expenses attributable to Coronavirus”, the Hospital listed the same $2,072,205 in the Unreimbursed Expenses section. The Hospital did not list all the pass-through grants found on the SEFA within the Other Assistance Received section of the PRF Report. Additionally, The Hospital did not complete and submit its audit report prior to the required deadline. Cause and Effect: Management review was not effective in detecting and correcting the errors before report submission; therefore the Hospital’s reporting in the PRF reporting portal double-counted the PRF reimbursed expenses as Coronavirus expenses that were not reimbursed and omitted listing other grants. Due to a delay in the compiling of records related to the audit, the Hospital was not in compliance with the reporting requirements. Questioned costs: None Repeat finding: No Recommendation: We recommend that internal controls be strengthened related to review of the quarterly lost revenue calculations and reporting in the PRF reporting portal. We recommend that the Hospital complete its audits and submit the required reports by the deadline. We recommend that the Hospital enter other assistance received by quarter during the period of availability on the PRF report. 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 2021-004: Payroll Significant Deficiency Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: Payroll approvals for individuals are not always made by individuals who are the employee’s supervisors or are otherwise knowledgeable about their level of effort during the payroll periods paid for. Cause: AAPT did not appropriately assign or ensure approval by payroll approvers based on who supervised or was otherwise knowledgeable of employee activity on federal grants. Effect or Potential Effect: Without an individual knowledgeable of an individual employee’s level of effort approving the time charged there is a greater risk that payroll payments are applied to a federal grant improperly, or leave is otherwise improperly omitted or overapplied to the individual’s leave balance. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-004. Recommendation: We recommend that AAPT change the designated approver for certain employees for whom the designated approver is not the employee’s supervisor or is not otherwise aware of the employee’s work efforts. Views of Responsible Officials and Planned Corrective Actions: AAPT has made changes to correctly reflect the employee’s assigned supervisor based on the position and job duties of the employees. Anticipated Completion Date: 04/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2021-004: Payroll Significant Deficiency Federal Programs: Research and Development Cluster: 47.076 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: Payroll approvals for individuals are not always made by individuals who are the employee’s supervisors or are otherwise knowledgeable about their level of effort during the payroll periods paid for. Cause: AAPT did not appropriately assign or ensure approval by payroll approvers based on who supervised or was otherwise knowledgeable of employee activity on federal grants. Effect or Potential Effect: Without an individual knowledgeable of an individual employee’s level of effort approving the time charged there is a greater risk that payroll payments are applied to a federal grant improperly, or leave is otherwise improperly omitted or overapplied to the individual’s leave balance. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-004. Recommendation: We recommend that AAPT change the designated approver for certain employees for whom the designated approver is not the employee’s supervisor or is not otherwise aware of the employee’s work efforts. Views of Responsible Officials and Planned Corrective Actions: AAPT has made changes to correctly reflect the employee’s assigned supervisor based on the position and job duties of the employees. Anticipated Completion Date: 04/01/2024 Responsible Official: Michael Brosnan, CFO
Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Rural Distribution Criteria 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition The Association had 26 invoices identified as eligible that were not reviewed and approved. The Associations had 6 timesheets that were not reviewed and approved. In addition, the Association’s final expenditure listing, lost revenue calculation identified as eligible and claimed under the Provider Relief Fund program, and special report submitted to the Department of Health and Human Services for Period 1 did not have evidence of being reviewed and approved by a separate individual outside of the preparer. Cause The Association did not have an adequate internal control policy in place to ensure review and approval over specifically identified invoices and timesheets, the final expenditure listing, the lost revenue calculation, or preparation of HHS Period 1 reporting were documented. Effect The lack of adequate policies governing the review and approval of invoices, timesheets, expenditure listings, lost revenue calculation and the HHS Period 1 report increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Without a secondary review and approval, there is a possibility that ineligible expenditures may be claimed under the program. Context Detail testing was completed over $777,856 of the expenses along with the calculation for lost revenue for activities allowed and unallowable and allowable cost/cost principles. A nonstatistical sample of 40 expenditures (29 nonpayroll and 11 payroll) were selected for detailed testing, 26 invoices did not have evidence of being reviewed and approved and 6 timesheets didn’t have evidence of being reviewed. The overall expense listings and lost revenue worksheet did not have evidence of a review by someone other than the preparer (i.e., population of two). The Report submitted to HHS also did not have a documented secondary review and approval (i.e., population of one). Recommendation We recommend the Association enhance internal controls policies to ensure all invoices are reviewed and approved to ensure all expenses claimed under the federal program are necessary, correct and meet the requirements of the federal program. We also recommend the Association implement a control process which includes a secondary review and approval of the final expenditure listing and lost revenue calculation used to claim the allowable costs under the federal program and that there is documented evidence of the review and approval. In addition, the Report submitted to HHS should have a secondary review and approval that is documented.Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding, has prepared an assessment of the root causes of this material weakness, and has developed a corrective action plan. Indication of Repeat Finding This is not a repeat finding in the current year.
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-004: Payroll Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1624185 (9/16/2016 – 8/31/2022), 1726113 (8/1/2017 – 9/30/2023) Significant Deficiency in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: Payroll approvals for individuals are not always made by individuals who are the employee’s supervisors or are otherwise knowledgeable about their level of effort during the payroll periods paid for. Of the 31 individual payroll payments tested to 7 separate individuals, totaling $63,848, we identified 16 total payments to 4 separate individuals, totaling $14,907 charged to federal grants, where the timesheet was approved by the CFO, who we do not consider to be knowledgeable of the employee’s activities during a given pay period. One of these four individuals was a full-time employee and the other three were part-time employees. Cause: AAPT’s internal policies and procedures governing procurement were not consistently applied. Effect or Potential Effect: Without an individual knowledgeable of an individual employee’s level of effort approving the time charged there is a greater risk that payroll payments are applied to a federal grant improperly, or leave is otherwise improperly omitted or overapplied to the individual’s leave balance. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-004. Recommendation: We recommend that AAPT change the designated approver for certain employees for whom the designated approver is not the employee’s supervisor or is not otherwise aware of the employee’s work efforts. Views of Responsible Officials and Planned Corrective Actions: AAPT has made changes to correctly reflect the employee’s assigned supervisor based on the position and job duties of the employees. Anticipated Completion Date: 04/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-004: Payroll Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1624185 (9/16/2016 – 8/31/2022), 1726113 (8/1/2017 – 9/30/2023) Significant Deficiency in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: Payroll approvals for individuals are not always made by individuals who are the employee’s supervisors or are otherwise knowledgeable about their level of effort during the payroll periods paid for. Of the 31 individual payroll payments tested to 7 separate individuals, totaling $63,848, we identified 16 total payments to 4 separate individuals, totaling $14,907 charged to federal grants, where the timesheet was approved by the CFO, who we do not consider to be knowledgeable of the employee’s activities during a given pay period. One of these four individuals was a full-time employee and the other three were part-time employees. Cause: AAPT’s internal policies and procedures governing procurement were not consistently applied. Effect or Potential Effect: Without an individual knowledgeable of an individual employee’s level of effort approving the time charged there is a greater risk that payroll payments are applied to a federal grant improperly, or leave is otherwise improperly omitted or overapplied to the individual’s leave balance. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-004. Recommendation: We recommend that AAPT change the designated approver for certain employees for whom the designated approver is not the employee’s supervisor or is not otherwise aware of the employee’s work efforts. Views of Responsible Officials and Planned Corrective Actions: AAPT has made changes to correctly reflect the employee’s assigned supervisor based on the position and job duties of the employees. Anticipated Completion Date: 04/01/2024 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
Finding 2021-002: Segregation of Duties Federal Program: Research and Development Cluster (Education and Human Resources) Assistance Listing Number and Title: 47.076 STEM Education Name of Federal Agency, Pass Through Entity (when applicable), Award Number and Year: National Science Foundation: 1431638 (9/1/2014 – 8/31/2022), 1524963 (11/1/2015 – 9/30/2021), 1500529 (9/1/2015 – 8/31/2022), 1624185 (9/16/2016 – 8/31/2022), 1640791 (9/15/2016 – 8/31/2022), 1720869 (5/15/2017 – 4/30/2022), 1726113 (8/1/2017 – 9/30/2023), 1821462 (7/1/2018 – 6/30/2024), 1812860 (9/1/2018 – 8/31/2020), 1940925 (1/15/2020 – 12/31/2023), 1907950 (7/1/2019 – 6/30/2024), 2015205 (4/1/2020 – 3/31/2022), 2021059 (10/1/2020 – 9/30/2024) Federal Program: Research and Development Cluster (Mathematical and Physical Sciences) Assistance Listing Number and Title: 47.049 Mathematical and Physical Sciences Name of Federal Agency, Pass Through Entity, Award Number and Year: National Science Foundation: 1821372 (10/1/2018 – 9/30/2024 pass through entity American Physical Society), 1834530 (9/1/2018 – 8/31/2025 pass through entity American Physical Society), 1938815 (8/1/2020 – 7/31/2024) Federal Program: Research and Development Cluster (Science) Assistance Listing Number and Title: 43.001 Science Name of Federal Agency, Pass Through Entity: National Aeronautics and Space Administration: NNX16AR36A (8/24/2016 – 8/23/2021 pass through entity Temple University of the Commonwealth System of Higher Education), 80NSSC21K1560 (6/28/2021 – 6/27/2022 pass through entity Temple University of the Commonwealth System of Higher Education) Material Weakness in Internal Controls Over Compliance, Other matters Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “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).” Condition: The Chief Financial Officer is responsible for posting entries into the accounting system without a second level review, and obtaining all bank statements unopened while also having the ability to add or modify payees and unilaterally initiate and authorize electronic fund transfers such as automated clearing house payments. The CFO is also responsible for opening the mail which may contain payments by check, and can manually reduce receivable balances. Cause: Accounting department employees have not been trained to perform tasks that would allow for a proper segregation of duties related to accounting entries. Employees outside of the accounting department are permitted to work from home, which limits the employees who can perform functions such as opening the mail. Effect or Potential Effect: If any one employee can control all stages of a transaction, defalcations or irregularities could occur and not be detected timely. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: 2020-002 Recommendation: We recommend that AAPT provide training to the Finance and Administration staff so that entries can be subject to supervisory review by an individual knowledgeable as to the propriety of the entries. We recommend that AAPT segregate the ability to initiate and authorize electronic payments. We recommend that an employee outside of the Finance and Administration department open the AAPT mail and create an initial recordation log of checks or cash received. Views of Responsible Officials and Planned Corrective Actions: AAPT has instituted the segregation of duties of submitting and approval of electronic payments. The senior accountant has been authorized to submit the ACH/Wire transfer requests. The CFO has the authorization of approval of submitted electronic payments. The change was activated around March 15, 2024 The staff will be trained on generating journal entries previous prepared by the CFO and supervised and approve by the CFO – completed date May 15, 2024 The administrative assistant of the CEO will come to AAPT twice weekly to process incoming mail and create an initial recordation log of checks or cash received. The administrative assistant will not have access in any system to enter/modify/delete any information related to checks that are received. Anticipated Completion Date: January 2025 Responsible Official: Michael Brosnan, CFO
FINDING 2021-003 Subject: Water and Waste Disposal Systems for Rural Communities - Internal Controls Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): FY 2021 Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, Earmarking Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the Town in order to ensure compliance with requirements related to the grant agreement and the following compliance requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Matching. Activities Allowed or Unallowed and Allowable Costs/Cost Principles There was no documented oversight, review, or approval process in place over federal expenditures related to the grant. Although the Town Council approved grant project related contracts, individual expenditures did not have a documented review process in place (or consistent Town Council approval) to ensure disbursements made were allowable and in accordance with contract provisions related to the grant. Matching No documented reports, spreadsheets, or calculations prepared by the Town were provided to ensure matching requirements were met or being met. Additionally, the Town Council was not reviewing and approving all federal expenditures (including matching expenditures) related to the grant. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 TOWN OF NEWPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the Town, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. It also placed the Town at risk of noncompliance with the grant agreement. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2021-004 Subject: Water and Waste Disposal System for Rural Communities - Reporting Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal System for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): FY 2021 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context Recipients are required to submit RD 442-2 (Statement of Budget, Income and Equity) and RD 442-3 (Balance Sheet) covering the fiscal year within 60 days of the end of the fiscal year to the United States Department of Agriculture (USDA). There was no documented oversight, review, or approval process to ensure the required RD 442-2 (Statement of Budget, Income and Equity) and RD 442-3 (Balance Sheet) reports were completed and submitted timely and accurately to the Department of Agriculture (USDA). Due to the lack of internal controls, the Town did not submit the required RD 442-2 and 442-3 reports to the USDA during the audit period. INDIANA STATE BOARD OF ACCOUNTS 19 TOWN OF NEWPORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 7 CFR 1780.47(e) states in part: ". . . within 60 days following the end of each fiscal year, furnish the RUS with annual financial statements, consisting of a verification of the organization's balance sheet and statement of income and expense by an appropriate official of the organization. Forms RD 442-2, 'Statement of Budget, Income and Equity,' and 442-3 may be used." Cause The Town was unable to provide documentation to show that the RD 442-2 and RD 442-3 reports were filed. Effect Without the proper implementation of an effectively designed system of internal controls, the Town could not ensure that the required reports were filed with the awarding agency. As such, the awarding agency did not have accurate and current information to discern the financial status of the Town's project. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions or the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Town's management design and implement a system of internal controls that would provide segregation of duties for the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that all required reports are filed timely and accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2021-005 Subject: Highway Planning and Construction - Procurement Federal Agency: U.S. Department of Transportation Federal Program: Highway Planning and Construction Cluster Assistance Listings Number: 20.205 Federal Award Numbers and Years (or Other Identifying Numbers): DES #1702829, DES #1801831, DES #1401027, DES #1592335, DES #1592338, DES #1902029, DES #1902197, DES #1902815, DES #1902818 Pass-Through Entity: Indiana Department of Transportation Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context The County had not properly designed or implemented a system of internal controls that would be effective in preventing, or detecting and correcting, noncompliance to ensure that the Local Public Agency (LPA) Selection Review Checklist was properly supported. The lack of internal controls resulted in noncompliance. For consultant contracting (engineering and design related services) the Local Public Agency (LPA), (La Porte County) will create and send a Request for Proposal (RFP) to the Indiana Department of Transportation (INDOT), who will review and advertise them. Consultants can then respond to those RFPs by completing and submitting a Letter of Interest (LOI). After all LOIs are received and ranked, the County reports the number of LOIs received on the LPA Selection Review Checklist. The County did not keep or maintain the LOIs as reported to the INDOT on the LPA Selection Review Checklist. As a result, the number of LOIs documented on the checklist provided to the INDOT could not be verified or audited. In addition, we were unable to ensure the minimum number of LOIs were received to meet the procurement competition standards. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 27 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 49 CFR 18.36(9) states: "Grantees and subgrantees will maintain records sufficient to detail the significant history of a procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price." Cause Management did not develop a system of internal controls to maintain records sufficient to detail the history of a procurement as required by retaining the LOIs. Effect The failure to establish an effective internal control system places the County at risk of noncompliance with the grant agreement and the compliance requirements and resulted in a Qualified Opinion. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management design and implement a proper system of internal controls to ensure the County retains the LOIs to ensure compliance with procurement requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2021-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): Regular FY 2021, Revenue Loss FY 2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the procurement and suspension and debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to entering into subawards and covered transactions with Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, recipients are required to verify that contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (e.g., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (ELPS), collection of a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. The County had not performed procedures to ensure the vendors were not suspended or debarred or otherwise excluded or disqualified from participation in federal assistance programs or activities during the audit period on 100 percent of the applicable two vendors that were paid with SLFRF funds, which totaled $657,583. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS, or (b) Collecting a certification from that person if allowed by this rule, or (c) Adding a clause or condition to the covered transaction with that person." Cause Management of the County did not develop a system of internal controls to ensure that policies and procedures were in place and followed, related to suspension and debarment. INDIANA STATE BOARD OF ACCOUNTS 29 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls, including policies and procedures to ensure its compliance with requirements related to suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2021-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Numbers and Years (or Other Identifying Numbers): Regular FY 2021, Revenue Loss FY 2021 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness, Modified Opinion Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the procurement and suspension and debarment compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 28 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Prior to entering into subawards and covered transactions with Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, recipients are required to verify that contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (e.g., grant agreement) that are expected to equal or exceed $25,000 and all subawards. The verification is to be done by checking the Excluded Parties List System (ELPS), collection of a certification from that person or entity, or adding a clause or condition to the covered transaction with that person or entity. Upon inquiring of the County to determine its policies and procedures related to suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), SLFRF funds, the County stated procedures were not in place to ensure vendors were not suspended or debarred prior to entering into covered transactions. The County had not performed procedures to ensure the vendors were not suspended or debarred or otherwise excluded or disqualified from participation in federal assistance programs or activities during the audit period on 100 percent of the applicable two vendors that were paid with SLFRF funds, which totaled $657,583. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS, or (b) Collecting a certification from that person if allowed by this rule, or (c) Adding a clause or condition to the covered transaction with that person." Cause Management of the County did not develop a system of internal controls to ensure that policies and procedures were in place and followed, related to suspension and debarment. INDIANA STATE BOARD OF ACCOUNTS 29 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors to whom payments equal to or in excess of $25,000 were not verified to be not suspended, debarred, or otherwise excluded. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls, including policies and procedures to ensure its compliance with requirements related to suspension and debarment. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2021-007 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): Revenue Loss FY 2021 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirement related to the grant agreement and the reporting compliance requirement. Recipients were required to submit a one-time Interim report to the U.S. Department of the Treasury (Treasury). The respective due date was August 31, 2021, or 60 days after receiving funding if funding was received by October 15. The report was to show expenditures by category. The County submitted the required interim report during the audit period. The County's process for the completion and submission of the Interim Report was that the County Auditor prepared the Interim Report based on the County's records, without a proper oversight or review process in place prior to submission. INDIANA STATE BOARD OF ACCOUNTS 30 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The Interim Report was determined to be materially misstated. The County understated the December 31, 2019 Base Year Revenues by $660,302. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary periodic reports providing detailed accounting of the uses of funds, . . ." Cause A proper system of internal controls was not designed or implemented by management of the County to ensure that policies and procedures were in place related to reporting to ensure the amounts reported were accurate. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, noncompliance. Noncompliance with the provision of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of federal funding to the County. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 31 LA PORTE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the management of the County establish a system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the County provides the Treasury with complete and accurate information for all reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2021-003 – Reporting, Non-compliance (Material Weakness) Federal Program: U.S. Department of Health and Human Services – ALN 93.498, COVID-19 Provider Relief Fund (PRF) 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. Specific criteria are established by the U.S. Department of Health and Human Services (HHS) with respect to allowable cost and reporting requirements for this program, including: Funds shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Entities may elect to calculate, and report lost revenue using one of three options. Entities electing to calculate lost revenue using Option i report net revenue from patient care for each quarter and each year 2019, 2020, and 2021. For entities electing to report lost revenues using Option ii, the difference between budgeted and actual patient care revenues, budgets must be approved before March 27, 2020 and cover each quarter during the period of availability. Entities electing to calculate lost revenues using another reasonable method should report using option iii. 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’s report or nine months after the end of the audit period (whichever is earlier). Condition and Context: Internal controls surrounding the review process performed were not effective in detecting and correcting the proper reporting prior to submission. In the Hospital’s Period 1 reporting in the PRF reporting portal, the Hospital entered Total Unreimbursed Expenses Attributable to Coronavirus of $6,308,940 instead of the Hospital’s actual Unreimbursed Expenses total of $1,724,167. The Hospital did not report a total of $120,930 in the Other Assistance Received section of the HRSA PRF Phase 1 Submission. Internal controls surrounding the review process performed were not effective in detecting and correcting the proper reporting prior to submission. Additionally, the Hospital improperly reported $177,904 in grant receipts that were included in the Other Assistance Received section of the HRSA Phase 1 Report as $49,461 in Q2 2020 Local, State, and Tribal Government Assistance, $118,443 in Q2 2020 FEMA Program Assistance and $10,000 in Q3 2020 Small Business Administration Assistance. Additionally, The Hospital did not complete and submit its audit report prior to the required deadline. Cause and Effect: Management review was not effective in detecting and correcting the omission of reporting for other assistance received by the Hospital or the incorrect reporting of funds. The Hospital was not in compliance with the audit filing requirement. Questioned Costs: None Repeat Finding: No Recommendation: We recommend that the Hospital strengthen internal controls to prevent omission of or improper inclusion in other assistance received by quarter during the period of availability and incorrect reporting of unreimbursed expenses on the PRF report. We recommend the Hospital ensure future audits are completed and submitted in a timely manner. Views of Responsible Officials of The Auditee: Management agrees with the finding. See accompanying corrective action plan.
Finding 2021-002 – Reporting – Material Weakness in Internal Control Over Compliance and Instance of Material Noncompliance. See finding 2021-002 for the included table. Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that 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 terms and conditions of the federal award. Condition/Context: Under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program (Provider Relief Fund), providers are required to submit reporting to the Health Resources Services Administration (HRSA) that describes the uses of the funds and how the provider complied with the terms and conditions of the program. The Organization received general and targeted funds for six different entities within the Organization. Repeat Findings from Prior Year(s): This is not a repeat finding. Cause and Effect: In addition to the challenges encountered while operating a health system during the Coronavirus (COVID-19) pandemic, leading up to the audit period, the Organization was significantly impacted by bankruptcy, turnover of leadership, and the lack of team members that had expertise with grant management and accounting. Those factors coupled with the evolving nature of PRF guidance led to incorrect reporting. The most significant effects noted were: - Lost revenues reported for Period 1 and Period 2 improperly included 2019 revenues from Astria Regional Medical Center, which closed due to reasons unrelated to the COVID-19 pandemic. This overstated lost revenues by approximately $140 million. However, as that issue related to a general distribution, it was determined Period 1 general distributions of $5,124,268 to Astria Health and Subsidiaries could be allocated to another entity within the Organization. Astria Sunnyside Hospital had unreimbursed lost revenue in excess of the Period 1 general distributions. As a result, while there are reporting issues as outlined in this finding, there are no related questioned costs arising from this matter. - Expenditures reported by the Organization were not supported by detailed schedules prior to the commencement of the single audit. After the start of related audit, management compiled and provided a detailed listing of expenditures that exceeded the $10,337,509 reported as expenditures for testing. - The Organization did not have proper controls in place to ensure the reports are prepared and reviewed by separate individuals and that evidence of review was documented and retained.- The Organization did not have proper document retention controls in place to support timely submission of three of five reports filed with HRSA. Questioned costs: None to be reported. Recommendation: We recommend management implement policies and procedures to ensure required reports for grants are prepared and reviewed by separate individuals with evidence of review documented and that financial reports are submitted timely with underlying support properly documented. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Organization will review and modify policies and procedures over Federal Grant Awards to ensure management implements policies and procedures to ensure there is understanding of the terms and conditions of Federal awards and that reports are prepared and reviewed by separate individuals with evidence of review documented.
Finding 2021-002 – Reporting – Material Weakness in Internal Control Over Compliance and Instance of Material Noncompliance. See finding 2021-002 for the included table. Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that 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 terms and conditions of the federal award. Condition/Context: Under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program (Provider Relief Fund), providers are required to submit reporting to the Health Resources Services Administration (HRSA) that describes the uses of the funds and how the provider complied with the terms and conditions of the program. The Organization received general and targeted funds for six different entities within the Organization. Repeat Findings from Prior Year(s): This is not a repeat finding. Cause and Effect: In addition to the challenges encountered while operating a health system during the Coronavirus (COVID-19) pandemic, leading up to the audit period, the Organization was significantly impacted by bankruptcy, turnover of leadership, and the lack of team members that had expertise with grant management and accounting. Those factors coupled with the evolving nature of PRF guidance led to incorrect reporting. The most significant effects noted were: - Lost revenues reported for Period 1 and Period 2 improperly included 2019 revenues from Astria Regional Medical Center, which closed due to reasons unrelated to the COVID-19 pandemic. This overstated lost revenues by approximately $140 million. However, as that issue related to a general distribution, it was determined Period 1 general distributions of $5,124,268 to Astria Health and Subsidiaries could be allocated to another entity within the Organization. Astria Sunnyside Hospital had unreimbursed lost revenue in excess of the Period 1 general distributions. As a result, while there are reporting issues as outlined in this finding, there are no related questioned costs arising from this matter. - Expenditures reported by the Organization were not supported by detailed schedules prior to the commencement of the single audit. After the start of related audit, management compiled and provided a detailed listing of expenditures that exceeded the $10,337,509 reported as expenditures for testing. - The Organization did not have proper controls in place to ensure the reports are prepared and reviewed by separate individuals and that evidence of review was documented and retained.- The Organization did not have proper document retention controls in place to support timely submission of three of five reports filed with HRSA. Questioned costs: None to be reported. Recommendation: We recommend management implement policies and procedures to ensure required reports for grants are prepared and reviewed by separate individuals with evidence of review documented and that financial reports are submitted timely with underlying support properly documented. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Organization will review and modify policies and procedures over Federal Grant Awards to ensure management implements policies and procedures to ensure there is understanding of the terms and conditions of Federal awards and that reports are prepared and reviewed by separate individuals with evidence of review documented.
Finding 2021-002 – Reporting – Material Weakness in Internal Control Over Compliance and Instance of Material Noncompliance. See finding 2021-002 for the included table. Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that 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 terms and conditions of the federal award. Condition/Context: Under the Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Program (Provider Relief Fund), providers are required to submit reporting to the Health Resources Services Administration (HRSA) that describes the uses of the funds and how the provider complied with the terms and conditions of the program. The Organization received general and targeted funds for six different entities within the Organization. Repeat Findings from Prior Year(s): This is not a repeat finding. Cause and Effect: In addition to the challenges encountered while operating a health system during the Coronavirus (COVID-19) pandemic, leading up to the audit period, the Organization was significantly impacted by bankruptcy, turnover of leadership, and the lack of team members that had expertise with grant management and accounting. Those factors coupled with the evolving nature of PRF guidance led to incorrect reporting. The most significant effects noted were: - Lost revenues reported for Period 1 and Period 2 improperly included 2019 revenues from Astria Regional Medical Center, which closed due to reasons unrelated to the COVID-19 pandemic. This overstated lost revenues by approximately $140 million. However, as that issue related to a general distribution, it was determined Period 1 general distributions of $5,124,268 to Astria Health and Subsidiaries could be allocated to another entity within the Organization. Astria Sunnyside Hospital had unreimbursed lost revenue in excess of the Period 1 general distributions. As a result, while there are reporting issues as outlined in this finding, there are no related questioned costs arising from this matter. - Expenditures reported by the Organization were not supported by detailed schedules prior to the commencement of the single audit. After the start of related audit, management compiled and provided a detailed listing of expenditures that exceeded the $10,337,509 reported as expenditures for testing. - The Organization did not have proper controls in place to ensure the reports are prepared and reviewed by separate individuals and that evidence of review was documented and retained.- The Organization did not have proper document retention controls in place to support timely submission of three of five reports filed with HRSA. Questioned costs: None to be reported. Recommendation: We recommend management implement policies and procedures to ensure required reports for grants are prepared and reviewed by separate individuals with evidence of review documented and that financial reports are submitted timely with underlying support properly documented. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Organization will review and modify policies and procedures over Federal Grant Awards to ensure management implements policies and procedures to ensure there is understanding of the terms and conditions of Federal awards and that reports are prepared and reviewed by separate individuals with evidence of review documented.
2021-004 – ALLOWABLE COSTS-INDIRECT COST ALLOCATION PLAN Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Non-profit organizations that charge indirect cost to federal awards based on federally negotiated rates should charge the award in accordance with any negotiated rate agreements and specific award conditions/limitations. Condition: The entity was subject to a 13% provisional rate utilizing a simplified allocation method that provided for certain adjustments to the distribution base. It was determined that the entity charged $703,925 for indirect costs during the year. However, the maximum amount of indirect costs pursuant to the provisional rate agreement was approximately $488,427. Questioned Costs: Approximately $215,498 (subject to final negotiated rate adjustments). Context: Total federal expenditures listed on the Schedule of Federal Awards was $6,267,848, of which $703,925 was charged to indirect costs. Cause: Management failed to ensure that indirect costs charged to the award were in accordance with the provisional rate in effect. Furthermore, internal controls and procedures related to the indirect cost allocation were not effectively designed or performed. Effect: National Center for the Advancement of STEM Education, Inc. is not in compliance with the indirect cost allocation plan requirements. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued) 2021-004 – ALLOWABLE COSTS-INDIRECT COST ALLOCATION PLAN (Continued) Federal Program Information: Federal Agency Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s) Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001 W15QKN-20-1-1000 Recommendation: Management should implement procedures, which ensure amounts charged as indirect costs are in accordance with rate agreements in effect. Views of Responsible Officials: Management concurs with the finding and has developed a plan to correct the finding.