2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
2020-002 Allowable Costs/Costs Principles – Nonpayroll Expenses Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of expenditures, it was noted that of the 60 samples tested, 2 pay applications or invoices were not adequately supported or authorized. Questioned Costs: Known questioned costs of $3,401.79. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed. Effect: ASRWSS is at risk of expending monies that are not necessary and reasonable for the administration of the award. Lack of proper controls can result in misappropriation of ASRWW resources. Repeat Finding: This finding was issued as prior year reference number 2019-002. Recommendation: CLA recommend that ASRWSS policies and procedures be followed consistently. We also recommend that supporting documentation be maintained and properly documented. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-003 Allowable Costs/Cost Principles – Payroll Expenses Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN Number: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 17 disbursements were not supported by an employee wage form on file. Questioned Costs: Known question costs of $22,574.36. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This finding was issued as prior year reference number 2019-003. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-004 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN Number: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 4 disbursements were not signed by employee and/or supervisor. Questioned Costs: Known question costs of $10,329.55. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This finding was issued as prior year reference number 2019-004. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-005 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN Number: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 23 disbursements were paid at a rate different than the approved wage form. Questioned Costs: Known question costs of $44,608.87. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
ederal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of expenditures, it was noted that of the 60 samples tested, 1 purchase order was created after the invoice. Questioned Costs: Known questioned costs of $14,525.00. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed. Effect: ASRWSS is at risk of expending monies that are not necessary and reasonable for the administration of the award. Lack of proper controls can result in misappropriation of ASRWW resources. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommend that ASRWSS policies and procedures be followed consistently. We also recommend that supporting documentation be maintained and properly documented. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
Federal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 4 disbursements were not supported by an employee wage form on file. Questioned Costs: Known question costs of $581.22. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-010 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 14 disbursements were not signed by employee and/or supervisor. Questioned Costs: Known question costs of $6,197.81. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This finding was issued as prior year reference number 2019-005. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-011 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 18 disbursements were paid at a rate different than the approved wage form. Questioned Costs: Known question costs of $21,610.87. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
Finding 2020-001 Federal Program: Highway Planning and Construction CFDA Number: 20.205 Federal Agency: U.S. Department of Transportation Federal Award Year: 2020 Grant numbers: ACNH 7101 (807), BRLS-5108 (137) Pass-Through Entity: State of California Department of Transportation Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Conditions Found: The City did not have adequate internal controls related to the reporting of expenditures on the SEFA for the Highway Planning and Construction program. The Gerald Desmond Bridge (Harbor Bridge) reconstruction was a $1.6 billion design, development, and construction project that included multiple funding sources, including federal, state, and private funds. As part of the completeness and accuracy of the SEFA control, the City needed to timely prepare and review a reconciliation of all of the federal, state, and private funding sources received for the overall Harbor Bridge project year-to-date, and determine at a proper level of precision, which expenditures were being reimbursed with federal funding sources to determine what amounts to report on the SEFA for the year ended September 30, 2020. This overall year-to-date reconciliation was not timely performed and as a result, an additional $21,383,260 of federal expenditures related to the Highway Planning and Construction program should have been reported on the SEFA for the year ended September 30, 2020. Cause and Effect: In discussing these conditions with the City, they stated the error was primarily due to the control over the completeness and accuracy of the SEFA was not timely performed and designed at the appropriate precision level for multi-year and multi-funded construction projects. Failure to establish effective internal controls regarding financial reporting for the preparation of the Schedule may prevent the City from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs: Not applicable. Statistical sampling: Not applicable. Repeat Finding: A similar finding was not reported in the prior year. Recommendation: We recommend the City implement a system of internal control that is designed and operating at a level of precision to ensure the Schedule is complete and accurate. View of Responsible Official: The Harbor Department acknowledges the finding. The Harbor Department believes this omission was the result of an internal miscommunication.
Finding 2020-001 Federal Program: Highway Planning and Construction CFDA Number: 20.205 Federal Agency: U.S. Department of Transportation Federal Award Year: 2020 Grant numbers: ACNH 7101 (807), BRLS-5108 (137) Pass-Through Entity: State of California Department of Transportation Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Conditions Found: The City did not have adequate internal controls related to the reporting of expenditures on the SEFA for the Highway Planning and Construction program. The Gerald Desmond Bridge (Harbor Bridge) reconstruction was a $1.6 billion design, development, and construction project that included multiple funding sources, including federal, state, and private funds. As part of the completeness and accuracy of the SEFA control, the City needed to timely prepare and review a reconciliation of all of the federal, state, and private funding sources received for the overall Harbor Bridge project year-to-date, and determine at a proper level of precision, which expenditures were being reimbursed with federal funding sources to determine what amounts to report on the SEFA for the year ended September 30, 2020. This overall year-to-date reconciliation was not timely performed and as a result, an additional $21,383,260 of federal expenditures related to the Highway Planning and Construction program should have been reported on the SEFA for the year ended September 30, 2020. Cause and Effect: In discussing these conditions with the City, they stated the error was primarily due to the control over the completeness and accuracy of the SEFA was not timely performed and designed at the appropriate precision level for multi-year and multi-funded construction projects. Failure to establish effective internal controls regarding financial reporting for the preparation of the Schedule may prevent the City from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs: Not applicable. Statistical sampling: Not applicable. Repeat Finding: A similar finding was not reported in the prior year. Recommendation: We recommend the City implement a system of internal control that is designed and operating at a level of precision to ensure the Schedule is complete and accurate. View of Responsible Official: The Harbor Department acknowledges the finding. The Harbor Department believes this omission was the result of an internal miscommunication.
Finding Number: 2020-007 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Commerce Economic Development Cluster CFDA: 11.307 Award #: 01-01-14843, 01-01-14844 Award Year: 03/06/19 – 06/06/22 03/06/19 – 05/21/22 Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 7 out of the 20 reports (12 financial, 8 performance) required to be submitted during the fiscal year and noted the following: • 1 of the 4 financial reports tested was not submitted to the Federal agency. • All 3 performance reports tested did not contain evidence of review and approval. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
Finding Number: 2020-008 Prior Year Finding Number: 2019-007 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Transportation Airport Improvement Program CFDA: 20.106 Award #: Various Award Year: Various Criteria – Per 2 CFR section 200.313, Equipment, property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and conditions of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Further, a physical inventory of equipment should be taken at least once every 2 years and reconciled to the equipment records along with the usage of an appropriate control system to safeguard and maintain equipment. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We noted that the Authority maintains an equipment listing for fixed assets purchased with federal funding. However, the Authority was unable to provide complete property records which met the stated requirements. Additionally, the Authority did not conduct a physical inventory count of equipment in the last two years. The most recent physical inventory count was performed during fiscal year 2017. Further, it does not appear that internal controls over compliance are operating at a level of precision to ensure compliance with the equipment management compliance requirements. Cause – The internal controls established for the records maintenance and physical inventory count did not fully operate as designed causing the Authority to fall out of compliance with the required timing of such physical inventory count. Effect or Potential Effect – There is a risk that inadequate monitoring of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority improve internal controls to ensure adherence to Federal regulations related to equipment record maintenance and physical inventory counts. There should be timely coordination and communication among all departments responsible for handling and managing such assets. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority recognize the importance of maintaining accurate and complete property records for fixed assets purchased with federal funding. A complete fixed asset inventory was conducted in 2023 and is now performed annually. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
Finding Number: 2020-009 Prior Year Finding Number: 2019-008 Compliance Requirement: Reporting Program: U.S. Department of Transportation Airport Improvement Program CFDA: 20.106 Award #: Various Award Year: Various Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 18 (9 financial and 9 performance) out of the 78 (49 financial and 29 performance) reports required to be submitted during the fiscal year and noted the following: • 1 financial report did not contain evidence of review and approval by one of the two designated reviewers. • 1 financial report was not submitted. • 9 performance reports did not contain evidence of review and approval. • 2 performance reports did not contain evidence of submission. • 2 financial and 1 performance reports had not been submitted in a timely manner. Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
Finding Number: 2020-010 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Transportation National Infrastructure Investments CFDA: 20.933 Award #: DTMA91G1600010 Award Year: 02/01/2017 - 03/31/2022 Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 4 out of the 9 special reports required to be submitted during the fiscal year and noted the following: • 2 reports were submitted to the Federal Agency; however, they did not contain evidence of review, approval, and submission. • 2 reports were not submitted to the Federal Agency. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
2020-002 – Allowable Costs & Period of Performance Material Weakness in Internal Controls Over Compliance and Instances of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 & SBAOCAML200065-01-00 Award Year(s): 2019 & 2020 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Lastly, according to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: The Organization was unable to provide underlying details and/or related documentation for $5,981 in expenditures reported under the Microloan Program to support the allowability or period of performance. Questioned Costs: $5,981 Context: During our audit procedures, we were unable to obtain general ledger detail or supporting documentation for $962 for Award #SBAOCAML200065-01-00 and $4,878 for Award #SBAHQ19Y0115 to substantiate total program non-payroll expenditures or period of performance. Additionally, during testing, three (3) out of 15 non-payroll disbursements, totaling $141, did not have supporting documentation. Cause: The Organization did not have internal controls in place to ensure adequate documentation and records retention to ensure compliance with grant requirements. Effect or potential effect: The Organization is out of compliance with 2 CFR Section 200.403(g) and the awards' periods of performance. Repeat Finding: No Recommendation: The Organization should implement controls to ensure accurate recordkeeping and document retention to substantiate expenditures allocated to grants. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure accurate recordkeeping, and to ensure that documents are retained to substantiate all expenditures allocated to grants. For additional information, see the Organization’s separate report for planned corrective actions.
2020-002 – Allowable Costs & Period of Performance Material Weakness in Internal Controls Over Compliance and Instances of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 & SBAOCAML200065-01-00 Award Year(s): 2019 & 2020 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Lastly, according to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition: The Organization was unable to provide underlying details and/or related documentation for $5,981 in expenditures reported under the Microloan Program to support the allowability or period of performance. Questioned Costs: $5,981 Context: During our audit procedures, we were unable to obtain general ledger detail or supporting documentation for $962 for Award #SBAOCAML200065-01-00 and $4,878 for Award #SBAHQ19Y0115 to substantiate total program non-payroll expenditures or period of performance. Additionally, during testing, three (3) out of 15 non-payroll disbursements, totaling $141, did not have supporting documentation. Cause: The Organization did not have internal controls in place to ensure adequate documentation and records retention to ensure compliance with grant requirements. Effect or potential effect: The Organization is out of compliance with 2 CFR Section 200.403(g) and the awards' periods of performance. Repeat Finding: No Recommendation: The Organization should implement controls to ensure accurate recordkeeping and document retention to substantiate expenditures allocated to grants. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure accurate recordkeeping, and to ensure that documents are retained to substantiate all expenditures allocated to grants. For additional information, see the Organization’s separate report for planned corrective actions.
2020-003 – Period of Performance Significant Deficiency in Internal Controls Over Compliance and Instances of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAOCAML200065-01-00 Award Year(s): 2020 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods." Condition: The Organization allocated three expenditures to Grant Award #SBA OCAML200065-01-00, which were outside the grant's period of performance. Questioned costs: $177 Context: During our audit procedures, we tested the entire population of costs associated with Award #SBAOCAML200065-01-00 and noted three rent payments were charged to the grant totaling $177 that were for months prior to the 07/01/2020-06/30/2021 period of performance. Cause: The Organization did not have internal controls in place to ensure funds were allocated to the correct grant's period of performance. Effect or potential effect: The Organization is out of compliance with Award #SBA OCAML200065-01-00's period of performance. Repeat finding: No Recommendation: The Organization should implement controls to ensure all expenditures allocated to grants are for costs incurred during the specified period of performance. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all expenditures allocated to grants are for costs incurred during the specified period of performance. For additional information, see the Organization’s separate report for planned corrective actions.
2020-003 – Period of Performance Significant Deficiency in Internal Controls Over Compliance and Instances of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAOCAML200065-01-00 Award Year(s): 2020 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods." Condition: The Organization allocated three expenditures to Grant Award #SBA OCAML200065-01-00, which were outside the grant's period of performance. Questioned costs: $177 Context: During our audit procedures, we tested the entire population of costs associated with Award #SBAOCAML200065-01-00 and noted three rent payments were charged to the grant totaling $177 that were for months prior to the 07/01/2020-06/30/2021 period of performance. Cause: The Organization did not have internal controls in place to ensure funds were allocated to the correct grant's period of performance. Effect or potential effect: The Organization is out of compliance with Award #SBA OCAML200065-01-00's period of performance. Repeat finding: No Recommendation: The Organization should implement controls to ensure all expenditures allocated to grants are for costs incurred during the specified period of performance. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all expenditures allocated to grants are for costs incurred during the specified period of performance. For additional information, see the Organization’s separate report for planned corrective actions.
2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
2020-004 – Reporting Significant Deficiency in Internal Controls Over Compliance and Instance of Noncompliance Assistance Listing Number: 59.046 Federal Agency/Pass-through Entity - Program Name: Small Business Administration - Microloan Program Award Number(s): SBAHQ19Y0115 Award Year(s): 2019 Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.329(c)(1) states, "Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period." Condition: The Organization submitted their "Combined MRF & LLRF Status Reports" for the quarter ending June 30, 2020, more than 30 days after the end of the quarter. Questioned costs: None Context: During our audit procedures, we tested two of the four quarterly “Combined MRF & LLRF Status Reports” and noted that the report for the period ending June 30, 2020, was submitted on October 13, 2020, which is 106 calendar days after period-end. The report is due 30 days after the period ends. Cause: The Organization did not have internal controls in place to ensure the “Combined MRF & LLRF Status Reports” were being filed within 30 calendar days of period end. Effect or potential effect: The Organization is out of compliance with 2 CFR 200.329(c)(1). Repeat finding: No Recommendation: The Organization should implement controls to ensure all reporting, both financial and performance, is completed, reviewed, and submitted before the specific report deadlines. Views of responsible officials: The Organization agrees with the finding and has implemented controls to ensure all reports are completed, reviewed, and submitted by specific report deadlines. For additional information, see the Organization’s separate report for planned corrective actions.
2020-002 Allowable Costs/Costs Principles – Nonpayroll Expenses Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of expenditures, it was noted that of the 60 samples tested, 2 pay applications or invoices were not adequately supported or authorized. Questioned Costs: Known questioned costs of $3,401.79. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed. Effect: ASRWSS is at risk of expending monies that are not necessary and reasonable for the administration of the award. Lack of proper controls can result in misappropriation of ASRWW resources. Repeat Finding: This finding was issued as prior year reference number 2019-002. Recommendation: CLA recommend that ASRWSS policies and procedures be followed consistently. We also recommend that supporting documentation be maintained and properly documented. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-003 Allowable Costs/Cost Principles – Payroll Expenses Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN Number: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 17 disbursements were not supported by an employee wage form on file. Questioned Costs: Known question costs of $22,574.36. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This finding was issued as prior year reference number 2019-003. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-004 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN Number: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 4 disbursements were not signed by employee and/or supervisor. Questioned Costs: Known question costs of $10,329.55. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This finding was issued as prior year reference number 2019-004. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-005 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of the Interior Federal Program Title: Bureau of Indian Affairs Facilities Operations and Maintenance ALN Number: 15.048 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Numbers and Period: A17AV00174 September 30, 2021 A13AV00271 September 30, 2016 A19AV00094 September 30, 2023 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 23 disbursements were paid at a rate different than the approved wage form. Questioned Costs: Known question costs of $44,608.87. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
ederal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of expenditures, it was noted that of the 60 samples tested, 1 purchase order was created after the invoice. Questioned Costs: Known questioned costs of $14,525.00. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed. Effect: ASRWSS is at risk of expending monies that are not necessary and reasonable for the administration of the award. Lack of proper controls can result in misappropriation of ASRWW resources. Repeat Finding: This is not a repeat finding. Recommendation: CLA recommend that ASRWSS policies and procedures be followed consistently. We also recommend that supporting documentation be maintained and properly documented. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
Federal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 4 disbursements were not supported by an employee wage form on file. Questioned Costs: Known question costs of $581.22. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-010 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 14 disbursements were not signed by employee and/or supervisor. Questioned Costs: Known question costs of $6,197.81. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This finding was issued as prior year reference number 2019-005. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
2020-011 Allowable Costs/Cost Principles – Payroll Federal Agency: U.S. Department of Reclamation Federal Program Title: Fort Peck Reservation Rural Water System ALN Number: 15.516 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: R03AV60749 March 31, 2019 R18AV00011 September 30, 2022 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Noncompliance Criteria or Specific Requirement: Per 2 CFR 200.303 awardees must establish and maintain effective internal control to provide reasonable assurance that federal funds are being used appropriately. Condition/Context: During our testing of payroll and payroll-related expenditures, it was noted that of the 60 samples tested, 18 disbursements were paid at a rate different than the approved wage form. Questioned Costs: Known question costs of $21,610.87. Unable to determine likely questioned costs. Cause: ASRWSS policies and procedures were not consistently followed, and appropriate documentation was not maintained. Effect: Unallowable costs could be charged to the program. Lack of proper controls can result in misappropriation of ASRWSS resources. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that ASRWSS follow their internal control policies and procedures to ensure that all expenditures are properly supported and charged to the correct grant. Views of Responsible Officials: There is no disagreement with the audit finding. Corrective Action Plan: See corrective action plan.
Finding 2020-001 Federal Program: Highway Planning and Construction CFDA Number: 20.205 Federal Agency: U.S. Department of Transportation Federal Award Year: 2020 Grant numbers: ACNH 7101 (807), BRLS-5108 (137) Pass-Through Entity: State of California Department of Transportation Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Conditions Found: The City did not have adequate internal controls related to the reporting of expenditures on the SEFA for the Highway Planning and Construction program. The Gerald Desmond Bridge (Harbor Bridge) reconstruction was a $1.6 billion design, development, and construction project that included multiple funding sources, including federal, state, and private funds. As part of the completeness and accuracy of the SEFA control, the City needed to timely prepare and review a reconciliation of all of the federal, state, and private funding sources received for the overall Harbor Bridge project year-to-date, and determine at a proper level of precision, which expenditures were being reimbursed with federal funding sources to determine what amounts to report on the SEFA for the year ended September 30, 2020. This overall year-to-date reconciliation was not timely performed and as a result, an additional $21,383,260 of federal expenditures related to the Highway Planning and Construction program should have been reported on the SEFA for the year ended September 30, 2020. Cause and Effect: In discussing these conditions with the City, they stated the error was primarily due to the control over the completeness and accuracy of the SEFA was not timely performed and designed at the appropriate precision level for multi-year and multi-funded construction projects. Failure to establish effective internal controls regarding financial reporting for the preparation of the Schedule may prevent the City from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs: Not applicable. Statistical sampling: Not applicable. Repeat Finding: A similar finding was not reported in the prior year. Recommendation: We recommend the City implement a system of internal control that is designed and operating at a level of precision to ensure the Schedule is complete and accurate. View of Responsible Official: The Harbor Department acknowledges the finding. The Harbor Department believes this omission was the result of an internal miscommunication.
Finding 2020-001 Federal Program: Highway Planning and Construction CFDA Number: 20.205 Federal Agency: U.S. Department of Transportation Federal Award Year: 2020 Grant numbers: ACNH 7101 (807), BRLS-5108 (137) Pass-Through Entity: State of California Department of Transportation Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Conditions Found: The City did not have adequate internal controls related to the reporting of expenditures on the SEFA for the Highway Planning and Construction program. The Gerald Desmond Bridge (Harbor Bridge) reconstruction was a $1.6 billion design, development, and construction project that included multiple funding sources, including federal, state, and private funds. As part of the completeness and accuracy of the SEFA control, the City needed to timely prepare and review a reconciliation of all of the federal, state, and private funding sources received for the overall Harbor Bridge project year-to-date, and determine at a proper level of precision, which expenditures were being reimbursed with federal funding sources to determine what amounts to report on the SEFA for the year ended September 30, 2020. This overall year-to-date reconciliation was not timely performed and as a result, an additional $21,383,260 of federal expenditures related to the Highway Planning and Construction program should have been reported on the SEFA for the year ended September 30, 2020. Cause and Effect: In discussing these conditions with the City, they stated the error was primarily due to the control over the completeness and accuracy of the SEFA was not timely performed and designed at the appropriate precision level for multi-year and multi-funded construction projects. Failure to establish effective internal controls regarding financial reporting for the preparation of the Schedule may prevent the City from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs: Not applicable. Statistical sampling: Not applicable. Repeat Finding: A similar finding was not reported in the prior year. Recommendation: We recommend the City implement a system of internal control that is designed and operating at a level of precision to ensure the Schedule is complete and accurate. View of Responsible Official: The Harbor Department acknowledges the finding. The Harbor Department believes this omission was the result of an internal miscommunication.
Finding Number: 2020-007 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Commerce Economic Development Cluster CFDA: 11.307 Award #: 01-01-14843, 01-01-14844 Award Year: 03/06/19 – 06/06/22 03/06/19 – 05/21/22 Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 7 out of the 20 reports (12 financial, 8 performance) required to be submitted during the fiscal year and noted the following: • 1 of the 4 financial reports tested was not submitted to the Federal agency. • All 3 performance reports tested did not contain evidence of review and approval. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
Finding Number: 2020-008 Prior Year Finding Number: 2019-007 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Transportation Airport Improvement Program CFDA: 20.106 Award #: Various Award Year: Various Criteria – Per 2 CFR section 200.313, Equipment, property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and conditions of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Further, a physical inventory of equipment should be taken at least once every 2 years and reconciled to the equipment records along with the usage of an appropriate control system to safeguard and maintain equipment. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We noted that the Authority maintains an equipment listing for fixed assets purchased with federal funding. However, the Authority was unable to provide complete property records which met the stated requirements. Additionally, the Authority did not conduct a physical inventory count of equipment in the last two years. The most recent physical inventory count was performed during fiscal year 2017. Further, it does not appear that internal controls over compliance are operating at a level of precision to ensure compliance with the equipment management compliance requirements. Cause – The internal controls established for the records maintenance and physical inventory count did not fully operate as designed causing the Authority to fall out of compliance with the required timing of such physical inventory count. Effect or Potential Effect – There is a risk that inadequate monitoring of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority improve internal controls to ensure adherence to Federal regulations related to equipment record maintenance and physical inventory counts. There should be timely coordination and communication among all departments responsible for handling and managing such assets. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority recognize the importance of maintaining accurate and complete property records for fixed assets purchased with federal funding. A complete fixed asset inventory was conducted in 2023 and is now performed annually. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
Finding Number: 2020-009 Prior Year Finding Number: 2019-008 Compliance Requirement: Reporting Program: U.S. Department of Transportation Airport Improvement Program CFDA: 20.106 Award #: Various Award Year: Various Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 18 (9 financial and 9 performance) out of the 78 (49 financial and 29 performance) reports required to be submitted during the fiscal year and noted the following: • 1 financial report did not contain evidence of review and approval by one of the two designated reviewers. • 1 financial report was not submitted. • 9 performance reports did not contain evidence of review and approval. • 2 performance reports did not contain evidence of submission. • 2 financial and 1 performance reports had not been submitted in a timely manner. Cause – It appears that policies and procedures, including review over reporting procedures, were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
Finding Number: 2020-010 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Transportation National Infrastructure Investments CFDA: 20.933 Award #: DTMA91G1600010 Award Year: 02/01/2017 - 03/31/2022 Criteria – Each State or Territory must file various financial, programmatic, and special reports. Additionally, the requirements necessitate that all submitted reports should be supported by the underlying performance records and presented in accordance with program requirements. Further, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We reviewed 4 out of the 9 special reports required to be submitted during the fiscal year and noted the following: • 2 reports were submitted to the Federal Agency; however, they did not contain evidence of review, approval, and submission. • 2 reports were not submitted to the Federal Agency. Cause – It appears that policies and procedures, including review over reporting procedures were not functioning as intended. Effect or Potential Effect – The Authority is not in compliance with the stated provisions and inaccurate information may have been reported to the Federal government. Failure to submit required reports could result in reduction or disallowance of Federal funding. Questioned Costs – None. Context – This is a condition identified per review of the Authority’s compliance with the specified requirements. Recommendation – We recommend that the Authority reevaluate its policies and procedures to ensure proper monitoring and review of the required reports by an appropriate official who would ensure the information submitted is complete, accurate, consistent, and submitted within the required timeframe. Views of Responsible Officials - The Authority concurs with the auditor’s findings and recommendations. The Authority will implement measures to ensure proper monitoring and review of the required reports by an appropriate official. The planned corrective actions are presented in the Authority’s Corrective Action Plan which is attached as Appendix B.
on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. The Unit did not have adequate documentation to support expenditures. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $23,700. Context: We noted that there was no primary, documented review for one of the seventeen sample vendor head start cluster accounts payable vouchers. Additionally, one of the vouchers was not supported by appropriate documentation. The voucher was for the purchase of gift cards for teachers to buy books for professional development. However, there was no backup or support showing what the gift cards were used to purchase. The total of this voucher was $23,700. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the Unit establish a documented, primary review of all head start cluster account payable claims before they are paid. Additionally, we recommend the Unit maintain all supporting documentation to show what the gift cards were used to purchase to ensure they are used for allowable purposes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. The Unit did not have adequate documentation to support expenditures. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $23,700. Context: We noted that there was no primary, documented review for one of the seventeen sample vendor head start cluster accounts payable vouchers. Additionally, one of the vouchers was not supported by appropriate documentation. The voucher was for the purchase of gift cards for teachers to buy books for professional development. However, there was no backup or support showing what the gift cards were used to purchase. The total of this voucher was $23,700. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the Unit establish a documented, primary review of all head start cluster account payable claims before they are paid. Additionally, we recommend the Unit maintain all supporting documentation to show what the gift cards were used to purchase to ensure they are used for allowable purposes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. The Unit did not have adequate documentation to support expenditures. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $23,700. Context: We noted that there was no primary, documented review for one of the seventeen sample vendor head start cluster accounts payable vouchers. Additionally, one of the vouchers was not supported by appropriate documentation. The voucher was for the purchase of gift cards for teachers to buy books for professional development. However, there was no backup or support showing what the gift cards were used to purchase. The total of this voucher was $23,700. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the Unit establish a documented, primary review of all head start cluster account payable claims before they are paid. Additionally, we recommend the Unit maintain all supporting documentation to show what the gift cards were used to purchase to ensure they are used for allowable purposes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. The Unit did not have adequate documentation to support expenditures. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $23,700. Context: We noted that there was no primary, documented review for one of the seventeen sample vendor head start cluster accounts payable vouchers. Additionally, one of the vouchers was not supported by appropriate documentation. The voucher was for the purchase of gift cards for teachers to buy books for professional development. However, there was no backup or support showing what the gift cards were used to purchase. The total of this voucher was $23,700. Identification as a repeat finding, if applicable: No. Recommendation: We recommend that the Unit establish a documented, primary review of all head start cluster account payable claims before they are paid. Additionally, we recommend the Unit maintain all supporting documentation to show what the gift cards were used to purchase to ensure they are used for allowable purposes. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: None. Context: We noted that for two federal financial reports in a sample of two reports, the Supervisor prepared the report without a secondary, documented review before the submission of the report to ensure the accuracy of the report. The amounts reported agreed to the supporting records without error. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the Unit implement a documented, formal review of the reports before they are submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: None. Context: We noted that for two federal financial reports in a sample of two reports, the Supervisor prepared the report without a secondary, documented review before the submission of the report to ensure the accuracy of the report. The amounts reported agreed to the supporting records without error. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the Unit implement a documented, formal review of the reports before they are submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: None. Context: We noted that for two federal financial reports in a sample of two reports, the Supervisor prepared the report without a secondary, documented review before the submission of the report to ensure the accuracy of the report. The amounts reported agreed to the supporting records without error. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the Unit implement a documented, formal review of the reports before they are submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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: An effective internal control system was not in place at the Unit in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: None. Context: We noted that for two federal financial reports in a sample of two reports, the Supervisor prepared the report without a secondary, documented review before the submission of the report to ensure the accuracy of the report. The amounts reported agreed to the supporting records without error. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the Unit implement a documented, formal review of the reports before they are submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria: • §200.303 Internal controls establishes that “The non-Federal entity must (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards, (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards., (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. • • 2 CFR §200.332 Requirements for pass-through entities establishes that “All pass-through entities 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. • • Pass-through entity monitoring of the subrecipient must include (1) Reviewing financial and performance reports required by the pass-through entity; (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass- through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward; (3) Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by § 200.521; and (4) The pass-through entity is responsible for resolving audit findings specifically related to the subaward and not responsible for resolving crosscutting findings”. Condition: The Chapter 11 Subrecipients Management and Monitoring Manual, subrecipients with risk assessment profile classified as High-High Risk (HH), require an annual site visit. However, during the year ended June 30, 2020, from six (6) subrecipients classified as HH, two (2) were not visited during the period. The subrecipients not visited were the following: Cause: Lack of implementation of work plan that includes monitoring process for at least major subrecipients before year end, in order to avoid noncompliance on subrecipients’ procedures. Effects: • • Noncompliance may be performed by subrecipients without timely evaluation to remediate possible questioned costs, which may result in delay receipt of funds through remediation be implemented. • • Incomplete monitoring process can prevent COR3 from timely detection of a material noncompliance from subrecipients. Questioned Costs: None. Identification as a repeat finding: Finding is a repeat of a finding in the immediately prior year and was identified as finding number 2019-07. Recommendation: • • We recommend management to implement a work plan for monitoring subrecipients to ascertain that major subrecipients be monitored during the year, or at reaching to determine threshold on used federal funds used in order to timely react to and avoid possible non-compliances. • • In addition, we recommended management to ascertain that all procedures related to the monitoring process be implemented.
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria In accordance with §200.305, Federal payment, Grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of Federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 6 drawdowns to test controls over cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria In accordance with §200.305, Federal payment, Grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of Federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 6 drawdowns to test controls over cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria In accordance with §200.305, Federal payment, Grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of Federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 6 drawdowns to test controls over cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria In accordance with §200.305, Federal payment, Grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of Federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 6 drawdowns to test controls over cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria In accordance with §200.305, Federal payment, Grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of Federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 6 drawdowns to test controls over cash management. We noted there was no formal approval or evidence of review for these drawdowns. Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.