2020-102 Lack of Cash Management Documentation (prior two years 2019-104 and 2018-007) (initially reported 2016) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Cash Management Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization made drawdowns after month-end based on budgeted period expenditures. Insufficient documentation was kept to clearly document that the amount requested was reviewed for accuracy. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Based on grant compliance requirements related to cash management for grants and cooperative agreements to nonfederal entities that are paid on a reimbursement basis, supporting documentation should include the actual costs for which reimbursement was requested and were paid prior to the date of the reimbursement request. Cause: Reimbursement was requested based on the budgeted payroll expenses made for a particular period, adjusted to exclude certain employees that are not related to the grant or are highly paid employees to be conservative in the calculation. No indication of a review process involved beyond the CFO preparing a calculation to request reimbursement and making the request from the grantor. Effect: The Organization could request funds that may not have adequate supporting documentation. These errors could lead to the Organization losing funding under this program. Recommendation: Documentation should be based on actual and not budgeted payroll and it should be prepared and reviewed by someone other than the preparer. Also, it should directly link the amount requested to the related expenses to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenses are being considered expended through these funds, and that funds were requested and applied to the correct period. Update policies and procedures as needed to reflect changes, as applicable. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organizations policy and procedures related to support documentation retention has been evaluated and updated. Supporting documentation for all drawdown requests are retained by grant. The corrective action for this finding has been approved and implemented by the Organization.
2020-104 Lack of Documentation Related to Reporting and Lack of Controls Related to Filing Reports (prior two years 2019-106 and 2018-009) (initially reported 2018) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization did not maintain proper documentation in support of reporting requirements and there was no review of the reports prior to submission to the grantor, other than the review done by the preparer. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. Cause: The Organization has considered a third-party review after initial submission a sufficient internal control for the UDS report, and did not consider it necessary on the SF-425 due to the limited information required. Effect: The Organization could submit incorrect information. Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization has reviewed and updated its reporting policy and implemented the changes. The corrective action for this finding has been approved and implemented by the Organization.
2020-105 Lack of Required Policies Associated with Procurement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Procurement, Suspension and Debarment Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization does not have written policies in regards to procurement to ensure federal awards are being spent in accordance with federal and other specific requirements under the award. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, based on grant compliance requirements related to procurement and suspension and debarment, procurements under federal awards are to be made in compliance with applicable federal regulations and other procurement requirements specific to an award of sub award. In addition, ensure that covered transactions should be only with entities that are not suspended, debarred, or otherwise excluded. Cause: The Organization has not documented procedures which reflect applicable state and local laws and regulations to conform to the applicable federal statutes and procurement requirements identified in 2 CFR part 200. Effect: The Organization could obtain goods and services outside of the procurement requirements identified in 2 CFR part 200. Recommendation: The Organization should create written policies for procurement to ensure federal awards are being spent in accordance with federal and other requirements under the award. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization will review and update its existing policies to include procurement to ensure federal awards are being spent in accordance with federal and other specific requirements under the awards. The Organization expects to have this implemented by March 1, 2023.
2020-106 Use of Budgeted Versus Actual Costs for Reimbursements (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: The Organization made drawdowns after month-end based on budgeted period expenses. Insufficient documentation was kept to clearly document that the amount requested was reviewed for accuracy. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, based on grant compliance requirements related to allowable costs, direct costs are those costs that can be specifically identified with a particular actual cost. Cause: Reimbursement was requested based on the budgeted payroll expenditures made for a particular period, adjusted to exclude certain employees that are not related to the grant or are highly paid employees to be conservative in the calculation. Adequate documentation was not maintained and no indication of a review process involved beyond the CFO preparing the calculation to request reimbursement and making the request from the grantor. Effect: The Organization could request funds that may not have adequate supporting documentation. These errors could lead to the Organization losing funding under this program. Recommendation: Documentation should be based on actual and not budgeted payroll and it should be prepared and reviewed by someone other than the preparer. Also, it should directly link the amount requested to the related expenses to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenses are being considered expended through these funds, and that funds were requested and applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization has reviewed and updated its grant drawdown procedures to included only actual cost and for the request to be reviewed and approved by someone other than the preparer prior to submission. The corrective action for this finding has been approved and implemented by the Organization.
2020-107 Lack of ACH Payment Review and Approval (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: Payments are not reviewed prior to ACH payments. The Organization has no documented policies and procedures for handling the processing and review of ACH payments. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Based on grant compliance requirements related to activities allowed and allowable costs, costs charged to federal programs under the HCP award must comply with the cost principles at 45 CRF part 75, subpart E, and any other requirements or restrictions on the use of federal funds. Based on compliance requirements related to period of performance, federal awards are charged for (a) allowable costs incurred during the period of performance: or (b) costs incurred prior to the date the federal award was made that were authorized by the federal awarding agency or pass-through entity. Cause: The payment for expenses under the program were not reviewed prior to payment for allowability of costs and whether the costs were incurred during the period of performance. Effect: The Organization could report costs that were not allowable or not incurred during the period of performance which could result in losing funding. Recommendation: We recommend the Organization develop policies and procedures related to processing and reviewing ACH payments under federal award programs for allowability of costs and determination of whether the costs were incurred during the period of performance. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing ACH payments prior to payment. We will update our policy to include a process for ACH reviews prior to payment. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2019-103 and 2018-006) (initially reported 2014) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner. Of twenty-seven encounters reviewed, we identified the following deficiencies and noncompliance with applicable requirements associated with application of the sliding fee scale. - Six of the twenty-seven encounters sampled were related to a program the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees. - One of the twenty-seven encounters sampled was related to the disaster recovery bus program that did not charge the patients for services. - Seven of the twenty-seven encounters sampled had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Health centers must prepare and apply a sliding fee discount schedule, so that the amounts owed for health center services by eligible patients are adjusted based on the patient's ability to pay ( 42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)). Cause: Failure to apply the sliding fee correctly, as noted in seven of the encounters above, was due to improper staff training or failure to properly monitor the process. Failure to obtain the required documentation associated with the six encounters above is due to the requirements of the agreement with the local school district, and one is due to procedures applied to the disaster recovery bus program that does not follow the written procedures of the Organization for use of the sliding fee scale. Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts. Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained on what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures. Patients should be billed the usual and customer billing rates for all services until all documentation is received or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients in order to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted. The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization’s policies for the sliding fee scale were recently updated during fiscal year 2022, by management, based on findings during the monitoring by HRSA performed in 2022, but management will consider discussing potential improvements to their policy with the grantor to potentially update it to allow for certain exceptions. The Organization will also consider discussing the agreement with the local school district in more detail with the grantor to either structure their policies to allow for these visits to have different requirements or to see if the grantor would be willing to provide a waiver with regards to theses visits not being technically in compliance with other regular clinic visits. The planned corrective action for this finding is currently in the process of development, approval, and implementation. The Organization expects to have the corrective action implemented by March 1, 2023. The Organization will continue to engage the consulting services of the professional certified accounting firm to assist in this process through completion.
2020-102 Lack of Cash Management Documentation (prior two years 2019-104 and 2018-007) (initially reported 2016) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Cash Management Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization made drawdowns after month-end based on budgeted period expenditures. Insufficient documentation was kept to clearly document that the amount requested was reviewed for accuracy. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Based on grant compliance requirements related to cash management for grants and cooperative agreements to nonfederal entities that are paid on a reimbursement basis, supporting documentation should include the actual costs for which reimbursement was requested and were paid prior to the date of the reimbursement request. Cause: Reimbursement was requested based on the budgeted payroll expenses made for a particular period, adjusted to exclude certain employees that are not related to the grant or are highly paid employees to be conservative in the calculation. No indication of a review process involved beyond the CFO preparing a calculation to request reimbursement and making the request from the grantor. Effect: The Organization could request funds that may not have adequate supporting documentation. These errors could lead to the Organization losing funding under this program. Recommendation: Documentation should be based on actual and not budgeted payroll and it should be prepared and reviewed by someone other than the preparer. Also, it should directly link the amount requested to the related expenses to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenses are being considered expended through these funds, and that funds were requested and applied to the correct period. Update policies and procedures as needed to reflect changes, as applicable. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organizations policy and procedures related to support documentation retention has been evaluated and updated. Supporting documentation for all drawdown requests are retained by grant. The corrective action for this finding has been approved and implemented by the Organization.
2020-104 Lack of Documentation Related to Reporting and Lack of Controls Related to Filing Reports (prior two years 2019-106 and 2018-009) (initially reported 2018) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization did not maintain proper documentation in support of reporting requirements and there was no review of the reports prior to submission to the grantor, other than the review done by the preparer. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. Cause: The Organization has considered a third-party review after initial submission a sufficient internal control for the UDS report, and did not consider it necessary on the SF-425 due to the limited information required. Effect: The Organization could submit incorrect information. Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization has reviewed and updated its reporting policy and implemented the changes. The corrective action for this finding has been approved and implemented by the Organization.
2020-105 Lack of Required Policies Associated with Procurement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Procurement, Suspension and Debarment Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization does not have written policies in regards to procurement to ensure federal awards are being spent in accordance with federal and other specific requirements under the award. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, based on grant compliance requirements related to procurement and suspension and debarment, procurements under federal awards are to be made in compliance with applicable federal regulations and other procurement requirements specific to an award of sub award. In addition, ensure that covered transactions should be only with entities that are not suspended, debarred, or otherwise excluded. Cause: The Organization has not documented procedures which reflect applicable state and local laws and regulations to conform to the applicable federal statutes and procurement requirements identified in 2 CFR part 200. Effect: The Organization could obtain goods and services outside of the procurement requirements identified in 2 CFR part 200. Recommendation: The Organization should create written policies for procurement to ensure federal awards are being spent in accordance with federal and other requirements under the award. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization will review and update its existing policies to include procurement to ensure federal awards are being spent in accordance with federal and other specific requirements under the awards. The Organization expects to have this implemented by March 1, 2023.
2020-106 Use of Budgeted Versus Actual Costs for Reimbursements (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: The Organization made drawdowns after month-end based on budgeted period expenses. Insufficient documentation was kept to clearly document that the amount requested was reviewed for accuracy. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, based on grant compliance requirements related to allowable costs, direct costs are those costs that can be specifically identified with a particular actual cost. Cause: Reimbursement was requested based on the budgeted payroll expenditures made for a particular period, adjusted to exclude certain employees that are not related to the grant or are highly paid employees to be conservative in the calculation. Adequate documentation was not maintained and no indication of a review process involved beyond the CFO preparing the calculation to request reimbursement and making the request from the grantor. Effect: The Organization could request funds that may not have adequate supporting documentation. These errors could lead to the Organization losing funding under this program. Recommendation: Documentation should be based on actual and not budgeted payroll and it should be prepared and reviewed by someone other than the preparer. Also, it should directly link the amount requested to the related expenses to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenses are being considered expended through these funds, and that funds were requested and applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization has reviewed and updated its grant drawdown procedures to included only actual cost and for the request to be reviewed and approved by someone other than the preparer prior to submission. The corrective action for this finding has been approved and implemented by the Organization.
2020-107 Lack of ACH Payment Review and Approval (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: Payments are not reviewed prior to ACH payments. The Organization has no documented policies and procedures for handling the processing and review of ACH payments. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Based on grant compliance requirements related to activities allowed and allowable costs, costs charged to federal programs under the HCP award must comply with the cost principles at 45 CRF part 75, subpart E, and any other requirements or restrictions on the use of federal funds. Based on compliance requirements related to period of performance, federal awards are charged for (a) allowable costs incurred during the period of performance: or (b) costs incurred prior to the date the federal award was made that were authorized by the federal awarding agency or pass-through entity. Cause: The payment for expenses under the program were not reviewed prior to payment for allowability of costs and whether the costs were incurred during the period of performance. Effect: The Organization could report costs that were not allowable or not incurred during the period of performance which could result in losing funding. Recommendation: We recommend the Organization develop policies and procedures related to processing and reviewing ACH payments under federal award programs for allowability of costs and determination of whether the costs were incurred during the period of performance. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing ACH payments prior to payment. We will update our policy to include a process for ACH reviews prior to payment. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2019-103 and 2018-006) (initially reported 2014) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner. Of twenty-seven encounters reviewed, we identified the following deficiencies and noncompliance with applicable requirements associated with application of the sliding fee scale. - Six of the twenty-seven encounters sampled were related to a program the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees. - One of the twenty-seven encounters sampled was related to the disaster recovery bus program that did not charge the patients for services. - Seven of the twenty-seven encounters sampled had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Health centers must prepare and apply a sliding fee discount schedule, so that the amounts owed for health center services by eligible patients are adjusted based on the patient's ability to pay ( 42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)). Cause: Failure to apply the sliding fee correctly, as noted in seven of the encounters above, was due to improper staff training or failure to properly monitor the process. Failure to obtain the required documentation associated with the six encounters above is due to the requirements of the agreement with the local school district, and one is due to procedures applied to the disaster recovery bus program that does not follow the written procedures of the Organization for use of the sliding fee scale. Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts. Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained on what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures. Patients should be billed the usual and customer billing rates for all services until all documentation is received or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients in order to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted. The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization’s policies for the sliding fee scale were recently updated during fiscal year 2022, by management, based on findings during the monitoring by HRSA performed in 2022, but management will consider discussing potential improvements to their policy with the grantor to potentially update it to allow for certain exceptions. The Organization will also consider discussing the agreement with the local school district in more detail with the grantor to either structure their policies to allow for these visits to have different requirements or to see if the grantor would be willing to provide a waiver with regards to theses visits not being technically in compliance with other regular clinic visits. The planned corrective action for this finding is currently in the process of development, approval, and implementation. The Organization expects to have the corrective action implemented by March 1, 2023. The Organization will continue to engage the consulting services of the professional certified accounting firm to assist in this process through completion.
2020-102 Lack of Cash Management Documentation (prior two years 2019-104 and 2018-007) (initially reported 2016) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Cash Management Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization made drawdowns after month-end based on budgeted period expenditures. Insufficient documentation was kept to clearly document that the amount requested was reviewed for accuracy. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Based on grant compliance requirements related to cash management for grants and cooperative agreements to nonfederal entities that are paid on a reimbursement basis, supporting documentation should include the actual costs for which reimbursement was requested and were paid prior to the date of the reimbursement request. Cause: Reimbursement was requested based on the budgeted payroll expenses made for a particular period, adjusted to exclude certain employees that are not related to the grant or are highly paid employees to be conservative in the calculation. No indication of a review process involved beyond the CFO preparing a calculation to request reimbursement and making the request from the grantor. Effect: The Organization could request funds that may not have adequate supporting documentation. These errors could lead to the Organization losing funding under this program. Recommendation: Documentation should be based on actual and not budgeted payroll and it should be prepared and reviewed by someone other than the preparer. Also, it should directly link the amount requested to the related expenses to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenses are being considered expended through these funds, and that funds were requested and applied to the correct period. Update policies and procedures as needed to reflect changes, as applicable. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organizations policy and procedures related to support documentation retention has been evaluated and updated. Supporting documentation for all drawdown requests are retained by grant. The corrective action for this finding has been approved and implemented by the Organization.
2020-104 Lack of Documentation Related to Reporting and Lack of Controls Related to Filing Reports (prior two years 2019-106 and 2018-009) (initially reported 2018) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization did not maintain proper documentation in support of reporting requirements and there was no review of the reports prior to submission to the grantor, other than the review done by the preparer. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards. Cause: The Organization has considered a third-party review after initial submission a sufficient internal control for the UDS report, and did not consider it necessary on the SF-425 due to the limited information required. Effect: The Organization could submit incorrect information. Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization has reviewed and updated its reporting policy and implemented the changes. The corrective action for this finding has been approved and implemented by the Organization.
2020-105 Lack of Required Policies Associated with Procurement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Procurement, Suspension and Debarment Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization does not have written policies in regards to procurement to ensure federal awards are being spent in accordance with federal and other specific requirements under the award. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, based on grant compliance requirements related to procurement and suspension and debarment, procurements under federal awards are to be made in compliance with applicable federal regulations and other procurement requirements specific to an award of sub award. In addition, ensure that covered transactions should be only with entities that are not suspended, debarred, or otherwise excluded. Cause: The Organization has not documented procedures which reflect applicable state and local laws and regulations to conform to the applicable federal statutes and procurement requirements identified in 2 CFR part 200. Effect: The Organization could obtain goods and services outside of the procurement requirements identified in 2 CFR part 200. Recommendation: The Organization should create written policies for procurement to ensure federal awards are being spent in accordance with federal and other requirements under the award. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization will review and update its existing policies to include procurement to ensure federal awards are being spent in accordance with federal and other specific requirements under the awards. The Organization expects to have this implemented by March 1, 2023.
2020-106 Use of Budgeted Versus Actual Costs for Reimbursements (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: The Organization made drawdowns after month-end based on budgeted period expenses. Insufficient documentation was kept to clearly document that the amount requested was reviewed for accuracy. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In addition, based on grant compliance requirements related to allowable costs, direct costs are those costs that can be specifically identified with a particular actual cost. Cause: Reimbursement was requested based on the budgeted payroll expenditures made for a particular period, adjusted to exclude certain employees that are not related to the grant or are highly paid employees to be conservative in the calculation. Adequate documentation was not maintained and no indication of a review process involved beyond the CFO preparing the calculation to request reimbursement and making the request from the grantor. Effect: The Organization could request funds that may not have adequate supporting documentation. These errors could lead to the Organization losing funding under this program. Recommendation: Documentation should be based on actual and not budgeted payroll and it should be prepared and reviewed by someone other than the preparer. Also, it should directly link the amount requested to the related expenses to clearly document those funds are being used in a timely manner, that more was not requested than was expended, specifically what expenses are being considered expended through these funds, and that funds were requested and applied to the correct period. Update policies and procedures as needed to reflect changes, if applicable. Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Organization has reviewed and updated its grant drawdown procedures to included only actual cost and for the request to be reviewed and approved by someone other than the preparer prior to submission. The corrective action for this finding has been approved and implemented by the Organization.
2020-107 Lack of ACH Payment Review and Approval (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Material Weakness in Internal Control Known Questioned Costs: $0 Condition: Payments are not reviewed prior to ACH payments. The Organization has no documented policies and procedures for handling the processing and review of ACH payments. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Based on grant compliance requirements related to activities allowed and allowable costs, costs charged to federal programs under the HCP award must comply with the cost principles at 45 CRF part 75, subpart E, and any other requirements or restrictions on the use of federal funds. Based on compliance requirements related to period of performance, federal awards are charged for (a) allowable costs incurred during the period of performance: or (b) costs incurred prior to the date the federal award was made that were authorized by the federal awarding agency or pass-through entity. Cause: The payment for expenses under the program were not reviewed prior to payment for allowability of costs and whether the costs were incurred during the period of performance. Effect: The Organization could report costs that were not allowable or not incurred during the period of performance which could result in losing funding. Recommendation: We recommend the Organization develop policies and procedures related to processing and reviewing ACH payments under federal award programs for allowability of costs and determination of whether the costs were incurred during the period of performance. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing ACH payments prior to payment. We will update our policy to include a process for ACH reviews prior to payment. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
2020-108 Lack of Controls over Costs Submitted for Reimbursement (initially reported 2020) Assistance Listing Number: 93.224 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020) Finding Type: Significant Deficiency in Internal Control Known Questioned Costs: $0 Condition: The Organization included an invoice for reimbursement under the program for which a vendor credit memo for the full amount of the invoice had been received due to miscoding of the credit memo to the correct COVID-19 class on the general ledger. In addition, the Organization did not include an applicable invoice for COVID-19 expenses for reimbursement due to the same miscoding of the COVID-19 class to the general ledger. Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under compliance requirements for allowable costs 2 CFR section 200.405(a)(1) costs should be incurred specifically for the federal award, and 2 CFR section 200.406(a) to the extent credits accruing or received by the nonfederal entity relate to allowable costs, they must be credited to the federal award program either as a cost reduction or cash refund as appropriate. Cause: The Organization did not apply the credit memo or the invoice to the correct general ledger classification resulting in the credit memo and invoice being incorrectly included or not included in the reimbursement request. Effect: The Organization is not applying for reimbursement with the correct supporting documentation which could lead to a loss of grant funding. Recommendation: The Organization should review the posting of any credit memos or applicable invoices to ensure they are posted to the correct account/classification so that only allowable costs which were incurred during the period of performance are included on any reimbursement requests. Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing the posting of credit memos or applicable invoices to ensure they are posted correctly. We will update our policy to include a process for review of credit memos prior to posting. The planned corrective action for this finding is currently in the process of development, approval, and implementation.
Finding Reference Number: 2020-001 - Reporting Federal Program Information U.S. Department of Housing and Urban Development Housing Trust Fund (ALN: 14.275) Criteria or specific requirement The Uniform Guidance 2 CFR section 200.303 states, “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.” Condition The Agency omitted federally-funded expenditures required to be reported as part of the Schedule for the year ended October 31, 2020. Cause The Agency’s internal controls in place over the preparation of the Schedule were not sufficient to accurately report all expenditures of federal awards. Effect The omission of expenditures resulted in a major program not being identified in a timely manner. Section III –Federal Awards Findings and Questioned Costs (continued) Questioned Costs None. Context Expenditures of ALN 14.275 Housing Trust Fund were understated by $38.8 million. Identification as a Repeat Finding, if applicable The finding is a repeat finding – Finding 2019-001. Recommendation The Agency should review its internal controls over the process of accumulating and reporting expenditures of federal awards. Views of Responsible Officials The Agency agrees with the finding and has developed internal controls to ensure accurate and complete reporting of federal expenditures.
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.
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.