Suspension and Debarment Prior Year Finding Number: 2023-003 Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov. Condition: The City did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov for one of 14 transactions tested. Questioned Costs: None. Context: 134 covered transactions were subject to suspension and debarment requirements. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City is not in compliance with federal regulations. Cause: The contract managers did not know verification of suspension and debarment using the federal listing was required. Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance. View of Responsible Official: Acknowledge
Subrecipient Monitoring Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.332 includes requirements such as evaluating the subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the award. Condition: The City did not have documentation of risk assessment procedures performed for two of the four subrecipients tested. Questioned Costs: None. Context: The City of Minneapolis has documented the subaward and subrecipient procedures that its staff are expected to follow. These procedures include the completion of a pre-award risk assessment form and for the form to be maintained in the contract file of the subrecipient. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City is not in compliance with federal regulations. Cause: City staff were not aware of the requirement to perform pre-award risk assessments with subrecipients. Recommendation: We recommend the City ensure that the City’s employees follow its procedures for completing risk assessments when contracting with subrecipients. View of Responsible Official: Concur
U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds - 21.027 Criteria or Specific Requirement - Suspension and Debarment and Material Weakness In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. In accordance with 2 CFR Section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition - Suspension and debarment checks were not completed for a vendor prior to entering into a contract. Cause - The City's controls to ensure suspension and debarment checks on vendors receiving federal funds did not operate effectively. Effect - Federal funds could be paid to entities that are suspended or debarred. Questioned Costs - None noted, as the vendor was reviewed and determined to not be suspended or debarred. Context - The City only entered into one contract during the year ended December 31, 2024 that was considered a "covered transaction" and spent approximately $540,000 under this contract. This single contract was selected for testing suspension and debarment and uncovered the City did not check the vendor's suspension and debarment status prior to purchase. The City completed the suspsension and debarment check subsequent to purchase and verified the vendor was not suspended or disbarred. Identification as a Repeat Finding, if applicable - None noted. Recommendation - Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors prior to making purchases with federal funds. View of Responsible Official and Planned Corrective Actions - Management agrees with the stated finding and has implemented a corrective action plan.
2024 – 001 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/24 - 12/31/24 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement According to § 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 and Context The Organization began allocating direct salaries and benefits prior to the awards period of performance start date. The Organization allocated expenditures based on the payroll paid date, rather than the date the payroll was incurred. Total direct salaries and benefits allocated to the grant prior to the period of performance start date was $21,049. Effect Potential that costs will be charged to the grant outside of the period of performance. Questioned Costs $21,049 Cause The Organization allocated payroll expenditures based on the paid date, rather than the incurred date. Recommendation We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.Views of Responsible Officials The Organization corrected the period of performance finding prior to the 2024 audit being completed and feel this was an isolated incident. The issue was caused by staff turnover in 2024, and new staff have been properly trained to review all grants to ensure compliance with all grant regulations. This grant can be used for staffing costs and upon identification of this issue we have corrected the allocations to the prior grant periods. Going forward, the Organization has implemented controls to ensure that all staff are being trained to ensure they are following grant guidelines.
2024 – 001 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/24 - 12/31/24 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement According to § 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 and Context The Organization began allocating direct salaries and benefits prior to the awards period of performance start date. The Organization allocated expenditures based on the payroll paid date, rather than the date the payroll was incurred. Total direct salaries and benefits allocated to the grant prior to the period of performance start date was $21,049. Effect Potential that costs will be charged to the grant outside of the period of performance. Questioned Costs $21,049 Cause The Organization allocated payroll expenditures based on the paid date, rather than the incurred date. Recommendation We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.Views of Responsible Officials The Organization corrected the period of performance finding prior to the 2024 audit being completed and feel this was an isolated incident. The issue was caused by staff turnover in 2024, and new staff have been properly trained to review all grants to ensure compliance with all grant regulations. This grant can be used for staffing costs and upon identification of this issue we have corrected the allocations to the prior grant periods. Going forward, the Organization has implemented controls to ensure that all staff are being trained to ensure they are following grant guidelines.
2024 – 001 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/24 - 12/31/24 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement According to § 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 and Context The Organization began allocating direct salaries and benefits prior to the awards period of performance start date. The Organization allocated expenditures based on the payroll paid date, rather than the date the payroll was incurred. Total direct salaries and benefits allocated to the grant prior to the period of performance start date was $21,049. Effect Potential that costs will be charged to the grant outside of the period of performance. Questioned Costs $21,049 Cause The Organization allocated payroll expenditures based on the paid date, rather than the incurred date. Recommendation We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.Views of Responsible Officials The Organization corrected the period of performance finding prior to the 2024 audit being completed and feel this was an isolated incident. The issue was caused by staff turnover in 2024, and new staff have been properly trained to review all grants to ensure compliance with all grant regulations. This grant can be used for staffing costs and upon identification of this issue we have corrected the allocations to the prior grant periods. Going forward, the Organization has implemented controls to ensure that all staff are being trained to ensure they are following grant guidelines.
FINDING 2024-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2024 Compliance Requirement: Reporting Audit Finding: Significant Deficiency INDIANA STATE BOARD OF ACCOUNTS 13 LAGRANGE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Recipients are required to quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a metropolitan county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) funding. As such, the initial P&E report, covering April 1, 2023 to March 31, 2024, was required to be submitted to the Treasury by April 30, 2024. The County submitted the annual P&E report during the audit period. The County's process for the completion and submission of the P&E reports was that the County Auditor prepared the P&E report based on the County's financial ledgers without a proper oversight or review process in place prior to submission. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not designed or implemented by management of the County to ensure that P&E reports were prepared by one individual and reviewed by another individual before submission to the Treasury. Effect Without the proper implementation of an effectively designed system of internal controls, errors could occur and remain undetected. As such, the County cannot ensure that the reports submitted are materially accurate and correct. INDIANA STATE BOARD OF ACCOUNTS 14 LAGRANGE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the County provides the Treasury with complete and accurate information for all reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Additionally, per 2 CFR §200.403 and §200.302, costs charged to federal awards must be allowable, allocable, and properly documented, and financial reporting must be accurate, complete, and supported by the accounting system. Condition: Although the Parish has implemented internal controls related to the allowability of costs and the preparation of required reports for the Coronavirus State and Local Fiscal Recovery funds, they were not operating effectively during fiscal year 2024. Tests of controls indicated that transactions were not tracked appropriately to ensure they were charged to the correct funding source. In addition, quarterly project and expenditure reports submitted to the U.S. Treasury included inaccurate or unsupported information due to a lack of tracking and reconciliation procedures. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: While no instances of noncompliance were noted, the lack of documented controls in practice increases the risk that future required reports could be incomplete, inaccurate, or untimely, as well as, federal costs being unallowed per the cost principles which could potentially result in program noncompliance. Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001, to prevent noncompliance of the Uniform Guidance as required.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: In accordance with 2 CFR § 200.331, a non-federal entity that passes federal awards to subrecipients is responsible for 1) evaluating each subrecipient’s risk of noncompliance, 2) monitoring the activities of subrecipients to ensure that the subaward is used for authorized purposes, in compliance with laws and the terms and conditions of the subaward, and 3) verifying that subrecipients have audits in accordance with the Uniform Guidance, if applicable. Adequate internal controls are required to ensure compliance with these requirements under 2 CFR § 200.303. Condition: During our audit, we noted that the Parish did not have sufficient internal controls in place to ensure effective subrecipient monitoring. Specifically, there was no documented risk assessment of subrecipients prior to issuing subawards, the Parish did not perform periodic reviews or site visits to monitor subrecipient performance or compliance, and the subrecipient audit reports were not consistently obtained or reviewed. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: Failure to properly monitor subrecipients increases the risk that federal funds may be misused or not spent in accordance with program requirements to achieve program objectives. It also exposes the Parish to potential liability for questioned costs incurred by subrecipients to be repaid to the federal agency. Recommendation: We recommend that the entity establish and implement formal policies and procedures for subrecipient monitoring in accordance with 2 CFR § 200.331. This should include conducting and documenting pre-award risk assessments, developing a subrecipient monitoring plan (e.g., site visits, desk reviews), reviewing subrecipient performance and audit reports on a regular basis.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
FINDING 2024-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): Contract #65851 Pass-Through Entity: Schneck Medical Center Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-001. Condition and Context An effective internal control system was not in place at the City to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. One vendor was identified that fell within the small purchase threshold. Purchases from the vendor totaled $148,800. As such, price or rate quotations from an adequate number of qualified sources should have been obtained. However, the City did not obtain price or rate quotations for the purchases, nor was full and open competition provided for the vendor. Additionally, there was no documentation available to support the rationale to limit competition. INDIANA STATE BOARD OF ACCOUNTS 15 CITY OF SEYMOUR SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City did not have policies or procedures in place for verifying that an entity with which it planned to enter into a covered transaction was not suspended, debarred, or otherwise excluded until November 25, 2024. One of the two vendors selected for testing, with covered transactions totaling $148,800, was not verified to ensure that the vendor was not suspended, debarred, or otherwise excluded. The lack of internal controls and noncompliance were systemic issues until the City implemented new policies and procedures in November 2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF SEYMOUR SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City did not have a procurement policy in place that contained the requirements of the procurement standards as outlined in the Code of Federal Regulations prior to entering into an agreement with the vendor. Due to the timing of the adoption of the City's Procurement and Suspension and Debarment Policy, which defines procedures to ensure they are properly procuring services and verifying suspension and debarment status for covered transactions, not all of the items selected for testing were in compliance. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure that goods and services are appropriately procured and that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended adhering to the newly implemented procurement policies to ensure compliance with state and federal laws and regulations for procuring goods and services paid with federal funds. We also recommended that management of the City adhere to its newly approved policy of internal controls to ensure that all contractors that are expected to be paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding #24-001 – Significant Deficiency in Internal Control over Financial Reporting: Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-002 – Significant Deficiency in Internal Control over Financial Reporting: Suspension & Debarment Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Finding #24-002 – Significant Deficiency in Internal Control over Financial Reporting: Suspension & Debarment Program Names: 3rd Street Housing Project Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services.
Finding #24-003 – Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-004 – Suspension & Debarment Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services.
Finding #24-001 – Significant Deficiency in Internal Control over Financial Reporting: Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-002 – Significant Deficiency in Internal Control over Financial Reporting: Suspension & Debarment Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Finding #24-002 – Significant Deficiency in Internal Control over Financial Reporting: Suspension & Debarment Program Names: 3rd Street Housing Project Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services.
Finding #24-003 – Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-004 – Suspension & Debarment Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services.
FINDING 2024-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Subrecipient Monitoring Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The County received an allocation of the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF) from the U.S. Department of the Treasury to support its response and recovery from the novel coronavirus. A portion of the County's allocation was then used to subaward funds to another entity (i.e., the subrecipient) to carry out an eligible use. The subaward was provided to the subrecipient via two different subaward agreements. Both subaward agreements were selected for testing. The County, as the pass-through entity, is to clearly identify the subaward and the terms and conditions of the award in the agreement with the subrecipient. During review of the two subaward agreements, it was determined that the Assistance Listings Number (ALN) and Federal Award Identification Number (FAIN) were not included as required. Additionally, the County as the pass-through entity, is to monitor the activities of the subrecipient to ensure that the subaward is used for authorized purposes in compliance with federal statutes, regulations, and terms and conditions of the subaward and that performance goals are achieved. Part of the monitoring requirements include verifying the subrecipient received an audit as required so as to be able to issue management decisions on any findings, as applicable. The County did not have a process in place to obtain and review audits received by the subrecipient. Therefore, the County would not have been able to issue management decisions or ensure timely and appropriate action by the subrecipient. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: "(a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.332 states in part: "All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. (i) Subrecipient name (which must match the name associated with its unique entity identifier); INDIANA STATE BOARD OF ACCOUNTS 14 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (ii) Subrecipient's unique entity identifier; (iii) Federal Award Identification Number (FAIN); (iv) Federal Award Date . . . of award to the recipient by the Federal agency; (v) Subaward Period of Performance Start and End Date; (vi) Subaward Budget Period Start and End Date; (vii) Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; (viii) Total Amount of Federal Funds Obligated to the subrecipient by the passthrough entity including the current financial obligation; (ix) Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; (x) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); (xi) Name of Federal agency, pass-through entity, and contact information for awarding official of the Pass-through entity; (xii) Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; (xiii) Identification of whether the award is R & D; and (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is used charged) per § 200.414. . . . (g) Consider whether the results of the subrecipient's audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity's own records. (h) Consider taking enforcement action against noncompliant subrecipients as described in § 200.339 of this part and in program regulations." Cause The County did not have adequate processes or procedures in place to ensure all of the proper information about the grant was provided to the subrecipient and all required monitoring activities were being conducted. Effect Not providing award identification information to subrecipients could result in the subrecipient not properly reporting the grant on their Schedule of Expenditures of Federal Awards. Furthermore, due to the absence of policies and procedures to monitor the activities of subrecipients, subrecipients could be spending federal funds for unauthorized purposes without the County's knowledge. As such, the County cannot ensure proper accountability and compliance with the program requirements. INDIANA STATE BOARD OF ACCOUNTS 15 HANCOCK COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County strengthen its system of internal controls to ensure that the County verifies that all subrecipients of federal awards receive an audit and that the County receives and reviews any audit reports of the subrecipients. Additionally, we recommended that the County strengthen its system of internal controls to ensure that subaward agreements include all required information that should be known to the subrecipient. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Condition: During our review of the District’s reporting procedures, we noted that the District does not have a documented or formalized internal review process for the preparation and submission of required quarterly reports. Reports are typically prepared and submitted by a single individual without supervisory review or approval. Criteria: In accordance with 2 CFR §200.328(b)(1), non-Federal entities are required to submit performance and/or financial reports on a regular basis as specified in the terms and conditions of the award. Effective internal controls, as outlined in 2 CFR §200.303, require that entities establish and maintain processes to ensure reliable reporting and compliance with federal requirements. Cause: This is the first year the District has been subject to a single audit, exceeding the $750,000 expenditure threshold, and has not yet developed formal policies or procedures for reviewing and approving required financial and programmatic reports. Effect: The absence of a formal review process increases the risk of reporting errors, late submissions, or omissions that could lead to noncompliance with federal reporting requirements. It also reduces the ability to detect and correct potential reporting deficiencies before submission to the federal awarding agency. Recommendation: We recommend that the District develop and implement formal policies and procedures to ensure that federal reports are reviewed for accuracy, completeness, and timeliness prior to submission. Management should assign responsibility for report preparation and review, implement checklists or reconciliation processes, and provide training to staff involved in federal reporting. Views of Responsible Officials: See the attached Corrective Action Plan.
Criteria or specific requirement: Per 2 CFR 200.303(a), the County must establish and maintain effective internal control over the Federal award that provides reasonable assurance that it 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 the ”Standards for Internal Control in the Federal Government” issued by the Comptroller General of the Untied States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Under Uniform Grant Guidance, the County must: • Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain required information including but not limited to: Federal and subaward information, indirect cost rate, and the subrecipient’s unique entity identifier (UEI). (2 CFR 200.332 (b)) • Evaluate each subrecipient’s fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring. (2 CFR 200.332 (c)) • Monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. (2 CFR 200.332 (e)) • Verify that a subrecipient is audited as required by 2 CFR 200.501. (2 CFR 200.332 (g))Condition: Subaward agreement was expired and did not include all required information, nor did the subrecipient have the required UEI. Subaward requirements were not communicated to the subrecipient; therefore, monitoring activities were not effective. Documentation of subrecipient risk assessment or audit verification not available for audit.Questioned Costs: None noted.Context: Audit procedures included testing of the one subrecipient who received a subaward during the year. There were no other subrecipients.Cause: The County’s procedures were not sufficient to ensure the subawards were issued or monitored in compliance with Federal requirements. Internal controls did not prevent or detect the errors.Effect: Failure to properly document required contract information, perform the necessary risk assessments, and document the review of the subrecipient’s single audit may result in noncompliance with grant terms and conditions. Subrecipients may have incomplete Schedules of Expenditures of Federal Awards, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance.
Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Numbers): FY24 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-004. Condition and Context Suspension and Debarment Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. INDIANA STATE BOARD OF ACCOUNTS 18 DECATUR COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The County did not have any policies or procedures in place during the audit period for verifying that an entity with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded. A population of eight covered transactions, totaling $596,598, that equaled or exceeded $25,000 paid from SLFRF funds was identified. For each of the eight transactions, the County did not verify the vendors' suspension or debarment status prior to payment due to the County not having any policies or procedures in place to verify that contractors were neither suspended nor debarred, or otherwise excluded or disqualified, from participating in federal assistance programs or activities. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The County worked on designing and implementing policies and procedures to verify that beneficiaries were not suspended or debarred, or otherwise excluded from participating in federal programs, but the procedures were not completed until 2025, so were not in place for the covered transactions paid in 2024. Effect Without the proper design or implementation of internal controls, the County could ensure that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover the funds. INDIANA STATE BOARD OF ACCOUNTS 19 DECATUR COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls to ensure that the current policy in place was properly implemented for all beneficiaries that are paid $25,000 or more, all or in part with federal funds, to ensure they are not suspended, debarred, or otherwise excluded from participating in federal programs. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY24 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-005. Condition and Context Recipients are required to submit quarterly or annually Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a metropolitan county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF). As such, the initial P&E report, covering the period from March 3, 2021 to March 31, 2022, was required to be submitted to the Treasury by April 30, 2022. The subsequent annual reports are to cover one calendar year and must be submitted to the Treasury by April 30 each year. The County submitted the P&E report by April 30, 2024, as required; however, a single employee prepared and submitted the P&E report without a review or oversight process in place to prevent, or detect and correct, errors. As a result, the following errors were noted: The current period expenditures for ten projects tested were understated by $533,935. In addition, current period expenditures for one project tested was overstated by $4,529. The cumulative expenditures for six projects tested were understated by $151,208. In addition, cumulative expenditures for three projects tested were overstated by $108,106. INDIANA STATE BOARD OF ACCOUNTS 20 DECATUR COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The current period obligations for four projects tested were understated by $205,178. In addition, current period obligations for four projects tested were overstated by $1,634,629. The cumulative obligations for one project tested was understated by $100,000. In addition, cumulative obligations for six projects tested were overstated by $2,007,842. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Coronavirus State and Local Fiscal Recovery Funds Compliance and Reporting Guidance, page 10, states in part: ". . . 10. Reporting. All recipients of federal funds must complete financial, performance, and compliance reporting as required and outlined in Part 2 of this guidance. Expenditures may be reported on a cash or accrual basis, as long as the methodology is disclosed and consistently applied. Reporting must be consistent with the definition of expenditures pursuant to 2 CFR 200.1. Your organization should appropriately maintain accounting records for compiling and reporting accurate, compliant financial data, in accordance with appropriate accounting standards and principles. . . ." 31 CFR 35.4(c) states in part: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary . . . periodic reports providing detailed accounting of the uses of funds . . ." Cause A proper system of internal controls, including policies and procedures, was not designed or implemented by management of the County to prevent and detect errors on the P&E report prior to submission. The County incorrectly reported projects that had been appropriated, but not yet obligated, and amounts reported did not always agree to the County's records. The reports submitted were not reviewed by a second person to identify these errors prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the County did not accurately report current period obligations and cumulative obligations when filing the P&E report for the period April 1, 2023 to March 31, 2024. INDIANA STATE BOARD OF ACCOUNTS 21 DECATUR COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Noncompliance with the provisions of federal regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. In addition, not meeting the SLFRF reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight of federal reports are taking place. We also recommended the development of policies and procedures to ensure the County provides the Treasury with complete and accurate information for the P&E report. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Highway Planning and Construction - Procurement Federal Agency: Department of Transportation Federal Program: Highway Planning and Construction Assistance Listings Number: 20.205 Federal Award Numbers and Years (or Other Identifying Numbers): DES. Nos. 1600968, 1702753, 1802927, 1802929, 1902066, 2301613 Pass-Through Entity: Indiana Department of Transportation Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context Recipients may use award funds to procure engineering and design-related services from consultants necessary to implement one or more eligible purposes outlined for the Highway Planning and Construction award funds. Subrecipients may adopt written policies and procedures prescribed by the awarding state DOT or prepare their own written policies and procedures approved by the Indiana Department of Transportation. The County did not have documented procurement procedures or policies used to procure engineering and design services. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 23 CFR 175 states in part: ". . . (b) Subrecipient responsibilities. Subrecipients shall develop and sustain organizational capacity and provide the resources necessary for the procurement, management, and administration of engineering and design related consultant services, reimbursed in whole or in part with FAHP funding as specified in 23 U.S.C. 106(g)(4)(A). Responsibilities shall include the following: (1) Adopting written policies and procedures prescribed by the awarding STA or other recipient for the procurement, management, and administration of engineering and design related consultant services in accordance with applicable Federal and State laws and regulations; or when not prescribed, shall include: (i) Preparing and maintaining its own written policies and procedures in accordance with paragraph (c) of this section; or (ii) Submitting documentation associated with each procurement and subsequent contract to the awarding STA or other grantee for review to assess compliance with applicable Federal and State laws, regulations, and the requirements of this part; (2) Procuring, managing, and administering engineering and design related consultant services in accordance with applicable Federal and State laws, regulations, and approved policies and procedures, as specified in 23 CFR 1.9(a). INDIANA STATE BOARD OF ACCOUNTS 14 RUSH COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (c) Written policies and procedures. The contracting agency shall prepare and maintain written policies and procedures for the procurement, management, and administration of engineering and design related consultant services. The FHWA shall approve the written policies and procedures, including all revisions to such policies and procedures, of the STA or recipient to assess compliance with applicable requirements. The STA or other recipient shall approve the written policies and procedures, including all revisions to such policies and procedures, of a subrecipient to assess compliance with applicable requirements. These policies and procedures shall address, as appropriate for each method of procurement a contracting agency proposes to use, the following items to ensure compliance with Federal and State laws, regulations, and the requirements of this part: (1) Preparing a scope of work and evaluation factors for the ranking/selection of a consultant; (2) Soliciting interests, qualifications, or proposals from prospective consultants; (3) Preventing, identifying, and mitigating conflicts of interest for employees of both the contracting agency and consultants and promptly disclosing in writing any potential conflict to the STA and FHWA, as specified in 2 CFR 200.112 and 23 CFR 1.33, and the requirements of this part. (4) Verifying suspension and debarment actions and eligibility of consultants, as specified in 2 CFR part 1200 and 2 CFR part 180; (5) Evaluating interests, qualifications, or proposals and the ranking/selection of a consultant; (6) Determining, based upon State procedures and the size and complexity of a project, the need for additional discussions following RFP submission and evaluation; (7) Preparing an independent agency estimate for use in negotiation with the selected consultant; (8) Selecting appropriate contract type, payment method, and terms and incorporating required contract provisions, assurances, and certifications in accordance with § 172.9; (9) Negotiating a contract with the selected consultant including instructions for proper disposal of concealed cost proposals of unsuccessful bidders; (10) Establishing elements of contract costs, accepting indirect cost rate(s) for application to contracts, and assuring consultant compliance with the Federal cost principles in accordance with § 172.11; (11) Ensuring consultant costs billed are allowable in accordance with the Federal cost principles and consistent with the contract terms as well as the acceptability and progress of the consultant's work; (12) Monitoring the consultant's work and compliance with the terms, conditions, and specifications of the contract; (13) Preparing a consultant's performance evaluation when services are completed and using such performance data in future evaluation and ranking of consultant to provide similar services; INDIANA STATE BOARD OF ACCOUNTS 15 RUSH COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (14) Closing-out a contract; (15) Retaining supporting programmatic and contract records, as specified in 2 CFR 200.333 and the requirements of this part; (16) Determining the extent to which the consultant, which is responsible for the professional quality, technical accuracy, and coordination of services, may be reasonably liable for costs resulting from errors and omissions in the work furnished under its contract; (17) Assessing administrative, contractual, or legal remedies in instances where consultants violate or breach contract terms and conditions, and providing for such sanctions and penalties as may be appropriate; and (18) Resolving disputes in the procurement, management, and administration of engineering and design related consultant services. (d) A contracting agency may formally adopt, by statute or within approved written policies and procedures as specified in paragraph (c) of this section, any direct Federal Government or other contracting regulation, standard, or procedure provided its application does not conflict with the provisions of 23 U.S.C. 112, the requirements of this part, and other laws and regulations applicable to the FAHP. (e) Notwithstanding paragraph (d) of this section, a contracting agency shall have a reasonable period of time, not to exceed 12 months from the effective date of this rule unless an extension is granted for unique or extenuating circumstances, to issue or update current written policies and procedures for review and approval in accordance with paragraph (c) of this section and consistent with the requirements of this part." 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The County's management was not aware of the compliance requirement relating to the written procurement policy. Effect The failure to establish a written policy for Federal Procurement placed the County in noncompliance with the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. INDIANA STATE BOARD OF ACCOUNTS 16 RUSH COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the County's management establish written policies and procedures for the procurement of engineering and design services. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that part of this report.
Federal Agency: U.S. Department of Education Federal Program Name: Rehab Services Demonstration & Training Program Assistance Listing Number: 84.235 Federal Award Identification Number and Year: H235F200005-2024 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 1/1/2024-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure reimbursement requests are formally reviewed by someone who did not prepare the request to verify the correct information and data is submitted. Condition: Entity does not perform formal documented reviews and approvals over indirect cost calculations and reimbursement requests prior to submission to granting agency. Questioned Costs: None Context: During our testing, we identified instances where there was no documented review and approvals over indirect cost calculations and reimbursement requests prior to submission to granting agency. Cause: The entity does not have a formal review or approval process in place. Effect: The entity is not in compliance with Federal Government requirements. Repeat Finding: No Recommendation: We recommend the entity implement procedures and a control to document review and approvals over indirect costs and cash management. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
Federal Award Findings and Questioned Costs: Finding Number: 2024-001 Federal Assistance Listing Number: 97.036 Program: COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Agency Name: Federal Emergency Management Agency Federal Award Number: D20-528 Federal Award Year: 2024 Criteria Per Title 2, U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Subpart E, Section 200.303), the nonfederal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, Subpart E Section 200.403 states that administrative closeout costs may be incurred until the due date of the final reports. If incurred, these costs must be liquidated prior to the due date of the final reports and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. Conditions Found In one of 25 selections for testwork over period of performance, expenditures related to contract labor were submitted for reimbursement to the Federal Emergency Management Agency (FEMA) that were outside of the project period. Further, the review performed over expenditures was not completed appropriately to identify this error, representing an instance of the District’s internal control not operating as designed. Cause The District does not have adequate controls in place to ensure that contract labor expenditures submitted for reimbursement by FEMA under the COVID 19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) program represent service dates within the project period. Effect Without effective controls in place, expenditures could be reimbursed by the program that were incurred outside of the project period, resulting in non compliance with program requirements. Questioned Costs $1,316, representing the known amount of expenditures incurred outside of the project period for the COVID 19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) program. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This finding is not a repeat finding in the immediate prior audit. Recommendation We recommend that management strengthen processes and controls in place to ensure contract labor expenditures submitted to FEMA for reimbursement under the COVID 19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) program are appropriately reviewed prior to submission to ensure they represent service dates within the project period. Views of Responsible Officials The District agrees with the finding and accepts the recommendation.
Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management approval prior to the drawdown of federal funds for 3 selections. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests.Views of Responsible Officials We have reviewed all our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering the accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a draw down can be requested in the payment management system. This new process to ensure the documented approval of federal fund drawdown's was implemented mid-year 2024, after the three selections in this finding were completed.
Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management approval prior to the drawdown of federal funds for 3 selections. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests.Views of Responsible Officials We have reviewed all our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering the accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a draw down can be requested in the payment management system. This new process to ensure the documented approval of federal fund drawdown's was implemented mid-year 2024, after the three selections in this finding were completed.
Criteria or Specific Requirement According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context During our testing, we noted the department was unable to provide documentation to support management approval prior to the drawdown of federal funds for 3 selections. Effect The Organization may drawdown the incorrect amount of federal funds. Questioned Costs None identified. Cause Management oversight. Approvals were done verbally and no documentation was recorded. Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests.Views of Responsible Officials We have reviewed all our internal controls to ensure all approvals are documented. The procedure has been updated to include preparing the draw documentation, entering the accounts receivable invoice into the accounting system, which now requires an approval for all accounts receivable invoices. Once the accounts receivable invoices are approved in the accounting system then a draw down can be requested in the payment management system. This new process to ensure the documented approval of federal fund drawdown's was implemented mid-year 2024, after the three selections in this finding were completed.
Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Passed Through: N/A Finding Type: Material weakness Condition: During our testing of this major program, we noted that the County incorrectly completed the SLFRF Compliance Report – SLT-2073 – P&E Report – 2025 by reporting erroneous amounts for all categories of obligations and expenditures during the period. Criteria: The Uniform Guidance (2 CFR section 200.303) requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Effective internal controls should include procedures in place to ensure accurate reporting of the activity. Cause: The County has not designed and implemented internal controls over its federal award programs to ensure compliance with the terms and conditions of its federal award programs. Effect: The County could provide incorrect information to the federal government regarding the actual federal awards expended and obligated. Context: Reporting was direct and material to the program. Each category of the report had incorrect information reported. Questioned Costs: None Recommendation: We recommend that management design and implement internal controls that would ensure the accurate preparation of all required reporting. Repeat Finding: No Views of Responsible Officials and Planned Corrective Action: The County agrees with the finding and the recommendation will be implemented.
Department of Homeland Security, Iowa Department of Homeland Security and Emergency Management, Federal Financial Assistance Listing 97.039, DR-4457-IA-0040 Hazard Mitigation Grant Program Procurement, Suspension & Debarment Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.318 maintains that recipients must have and use documented procurement policies and must conform procurement standards in sections 200.317 through 200.327. Condition: The cooperative’s procurement policy had not identified the dollar thresholds of procurement within the methods of procurement. In addition, one contract selected for testing was missing one of the required contract provisions. Cause: The cooperative’s procurement policy is very thorough and identifies the methods of procurement, however, management had not identified the thresholds of procurement included within the policy. Effect: The Cooperative’s policy was missing required information Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 7 transactions out of 29 transactions were selected for testing, which accounted for $1,134,758 of $3,548,469 federal program expenditures. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review their procurement policy to ensure it includes the dollar thresholds for each of the procurement methods. In addition, we suggest the Cooperative review their contracts to ensure it includes all the required contract provisions. Views of Responsible Officials: Management agrees with the finding.
U.S. Department of Veterans Affairs 2024-001 – Supportive Services for Veteran Families (SSVF) – Assistance Listing No. 64.033, Grant Period – September 2023 through September 30, 2025. Condition: Clear Path for Veterans New England, Inc. (the Organization) did not follow its internal controls regarding eligibility for the SSVF grant and as a result, the Organization did not recertify one program participant within the three month period to ensure continued program eligibility. Criteria: Department of Veteran Affairs SSVF Program Guide (the Program Guide), Section 2.5 Recertification of Eligibility, requires the recertification of a participant’s eligibility every three months, at a minimum. In addition, 2 CFR 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Cause: The Organization did not properly follow the Program Guide and its internal controls. Effect: The Organization did not recertify one program participant within the timeframe in accordance with its internal controls. Context: One out of thirteen applicants sampled. Our sample was not a statistically valid sample. This was not a repeat finding from a prior period. Questioned Costs: None Recommendations: Management should ensure that the Organization follow the Program Guide and ensure that the Organization’s internal controls in place are properly followed. Management Response: Management agrees with the finding and will provide additional training during fiscal year 2025 to its program staff to ensure that the Organization’s internal controls are properly followed.
Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Federal Agency: U.S. Department of the Treasury Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), ALN No. 21.027 Compliance Requirement: Reporting Repeat Finding: No Condition: During our testing of two quarterly reports, we noted that management was not able to provide supporting documentation that review procedures were performed before the submission of the performance reports. Questioned Costs: None Context: For both of the reports tested, management was not able to provide the required support showing that the reports were reviewed before submission. Criteria: 2 CFR part 200 section 200.303 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. Cause: There was significant turnover within the finance department of the City and grants administration was missing supervision by key personnel. Effect: The finding indicates that there could be some process improvements in how grant reports are reviewed, documented and maintained to provide evidence the compliance requirements are being met. Recommendation: We understand the grants administration has been assigned to a specific department. We recommend the agency implement procedures to ensure reports are properly reviewed as well as increase training efforts on reporting requirements if there is future staffing turnover.