Identification of the Federal Program: Federal Agency and Program Name: U.S. Department of Homeland Security Disaster Grants – Public Assistance (Presidentially Declared Disasters) Pass Through Grantor: Michigan State Police Emergency Management and Homeland Security Division Pass Through Award Number: 4494-DR-MI Pass through Award Period: 7/1/2022-4/30/2023 Assistance Listing #: 97.036 Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR 200.303 requires that the non-Federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per FEMA’s Public Assistance Program and Policy Guide V4, “The Subrecipient must provide documentation to support the actual costs within 90 days of work completion” Per FEMA FAQ: COVID-19 Pandemic: Public Assistance Disposition Requirements for Equipment and Supplies, Version 2, Question 14. Will FEMA allow stockpiling of equipment and supplies after May 11, 2023? “FEMA will apply the 90% federal cost share to funding for all eligible costs for work performed and items used from July 2, 2022, through May 11, 2023. FEMA will only reimburse for supplies purchased based on a justifiable need to be used or distributed by May 11, 2023. If supplies were purchased during the incident/eligibility period but ultimately not needed for pandemic response, those supplies would become part of the applicant’s stock and would be subject to disposition requirements.” Condition: During our audit we identified $1,077,759 in costs, included in the project 10 application, where the Personal Protective Equipment (PPE) and other COVID related supplies were not used within the period of performance outlined within the project worksheet. Cause: Corewell did not complete the inventory and usage analysis prior to submission of the project application to FEMA. Effect or Potential Effect: As a result of including PPE and other COVID related supplies that were not used prior to the specified period of performance, Corewell overstated the FEMA expenditures in the project 10 application. In addition, not completing the inventory and usage analysis prior to submission of the application could also potentially lead to requesting funding for such costs. Questioned Costs: $1,077,759 Context: There were three FEMA obligations during FY 2024. We identified the overstatement of expenditures in one of the projects (project 10) with an obligation amount of $6,732,507. The period of performance as specified within the project 10 application is July 2, 2022 to April 30, 2023 and $1,077,759 of costs were not used by April 30, 2023. The overstatement represents approximately 16% of the amounts reported in the project 10 application and 14% of the total FEMA obligations in FY 2024. The total federal expenditures for FEMA for FY 2024 were $7,795,530. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend management strengthen its internal controls and procedures and timely perform the inventory and usage of costs analysis prior to submission to FEMA. Views of Responsible Officials: Management will develop a process to perform, document, and sign off on a thorough claim review to validate that all final adjustments have been submitted prior to submitting the Request for Reimbursement to the State.
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR 200.303 requires that the non-Federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.318 (i) General Procurement Standards states, “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, selection of contract type, contractor selection or rejection, and the basis for the contract price.” Condition: Methodist did not maintain records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Cause: Methodist did not have effective internal controls and procedures in place to ensure Methodist maintained records for procurements sufficient to detail the history of procurement, including the rationale for the method of procurement and other required elements. Effect or Potential Effect: Methodist did not comply with the general procurement standards and methods of procurement to be followed per the Uniform Guidance to maintain sufficient detail of the history of the procurement, including the rationale of the method of procurement. Questioned Costs: $12,807 Context: EY selected and tested 10 procurements over $10,000 with expenditures totaling $182,415 from a population of $1,289,446 procurements over $10,000 during the year ended December 31, 2024. Of the 10 expenditures selected for testing 1 procurement totaling $12,807 did not have evidence of sole source justification Identification as a Repeat Finding: This is not a repeat finding. Recommendation: Methodist should retain written documentation for procurements, documenting the history of the procurement prior to the procurement of goods or services including, but not limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Views of Responsible Officials: Methodist recognizes the current gap between Supply Chain Services and the Research Institute related to retaining documents for procurement activities. Supply Chain Services will develop processes to retain written documentation for procurement activities in accordance with regulatory standards. As Methodist is in transition to a new ERP system in Quarter 1, 2026, Supply Chain Services will include strategies to address the needs in both the short term and long term.
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 awards in compliance with federal statues, regulation and conditions of the federal awards Condition and Context: Accounting tasks such as review and approval of expenditures applied to the grants play a key role in proving the accuracy of accounting data and information included in SEFA. During the audit, we noted various expenditures that did not have the proper approval by management prior to the charge being applied to the grant. Questioned Costs: None noted Effect: Costs could be charged to federal programs which are unallowed due to lack of review. Cause: The Organization experienced turnover in multiple positions in finance during the year which caused the review not to be consistent. By the end of 2024, the Organization had a formal process in place to ensure all expenditures were properly reviewed, however, we noted invoices in the early part of the year were not properly reviewed.
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 awards in compliance with federal statues, regulation and conditions of the federal awards Condition and Context: Accounting tasks such as review and approval of expenditures applied to the grants play a key role in proving the accuracy of accounting data and information included in SEFA. During the audit, we noted various expenditures that did not have the proper approval by management prior to the charge being applied to the grant. Questioned Costs: None noted Effect: Costs could be charged to federal programs which are unallowed due to lack of review. Cause: The Organization experienced turnover in multiple positions in finance during the year which caused the review not to be consistent. By the end of 2024, the Organization had a formal process in place to ensure all expenditures were properly reviewed, however, we noted invoices in the early part of the year were not properly reviewed.
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 awards in compliance with federal statues, regulation and conditions of the federal awards Condition and Context: Accounting tasks such as review and approval of expenditures applied to the grants play a key role in proving the accuracy of accounting data and information included in SEFA. During the audit, we noted various expenditures that did not have the proper approval by management prior to the charge being applied to the grant. Questioned Costs: None noted Effect: Costs could be charged to federal programs which are unallowed due to lack of review. Cause: The Organization experienced turnover in multiple positions in finance during the year which caused the review not to be consistent. By the end of 2024, the Organization had a formal process in place to ensure all expenditures were properly reviewed, however, we noted invoices in the early part of the year were not properly reviewed.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.576, Refugee and Entrant Assistance Discretionary Grants Federal Award Identification Number and Year: 90RE0316-01-00, 90RE0316-02-01, 90ZI0169-01-00, 90ZI0169-02-00 Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – During our testing over reporting, we noted instances in which there was no evidence of review and/or approval. None of the 3 samples selected for testing had evidence of review or approval. Questioned Costs – N/A Cause/Effect – Client reported that they were not aware that they needed to keep records of proof of review. As a result, certain submitted reports could have been misstated. Recommendation – We recommend management increase awareness of federal program compliance requirements and monitor compliance with the requirements on regular basis. In addition, we recommend that management review its procedures and controls in place to ensure that reports have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – The Organization has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, the Organization is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. The Organization has corrected this administrative issue and is committed to maintaining compliance through ongoing audits. View of Responsible Officials and Corrective Action Plan - Chaldean American Ladies of Charity has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, CALC is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. CALC has corrected this administrative issue and is committed to maintaining compliance through ongoing audits.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.576, Refugee and Entrant Assistance Discretionary Grants Federal Award Identification Number and Year: 90RE0316-01-00, 90RE0316-02-01, 90ZI0169-01-00, 90ZI0169-02-00 Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – During our testing over reporting, we noted instances in which there was no evidence of review and/or approval. None of the 3 samples selected for testing had evidence of review or approval. Questioned Costs – N/A Cause/Effect – Client reported that they were not aware that they needed to keep records of proof of review. As a result, certain submitted reports could have been misstated. Recommendation – We recommend management increase awareness of federal program compliance requirements and monitor compliance with the requirements on regular basis. In addition, we recommend that management review its procedures and controls in place to ensure that reports have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – The Organization has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, the Organization is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. The Organization has corrected this administrative issue and is committed to maintaining compliance through ongoing audits. View of Responsible Officials and Corrective Action Plan - Chaldean American Ladies of Charity has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, CALC is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. CALC has corrected this administrative issue and is committed to maintaining compliance through ongoing audits.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.576, Refugee and Entrant Assistance Discretionary Grants Federal Award Identification Number and Year: 90RE0316-01-00, 90RE0316-02-01, 90ZI0169-01-00, 90ZI0169-02-00 Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – During our testing over reporting, we noted instances in which there was no evidence of review and/or approval. None of the 3 samples selected for testing had evidence of review or approval. Questioned Costs – N/A Cause/Effect – Client reported that they were not aware that they needed to keep records of proof of review. As a result, certain submitted reports could have been misstated. Recommendation – We recommend management increase awareness of federal program compliance requirements and monitor compliance with the requirements on regular basis. In addition, we recommend that management review its procedures and controls in place to ensure that reports have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – The Organization has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, the Organization is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. The Organization has corrected this administrative issue and is committed to maintaining compliance through ongoing audits. View of Responsible Officials and Corrective Action Plan - Chaldean American Ladies of Charity has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, CALC is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. CALC has corrected this administrative issue and is committed to maintaining compliance through ongoing audits.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.576, Refugee and Entrant Assistance Discretionary Grants Federal Award Identification Number and Year: 90RE0316-01-00, 90RE0316-02-01, 90ZI0169-01-00, 90ZI0169-02-00 Finding Type – Material weakness in internal control over compliance Repeat Finding - No Criteria – Per 2 CFR § 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – During our testing over reporting, we noted instances in which there was no evidence of review and/or approval. None of the 3 samples selected for testing had evidence of review or approval. Questioned Costs – N/A Cause/Effect – Client reported that they were not aware that they needed to keep records of proof of review. As a result, certain submitted reports could have been misstated. Recommendation – We recommend management increase awareness of federal program compliance requirements and monitor compliance with the requirements on regular basis. In addition, we recommend that management review its procedures and controls in place to ensure that reports have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – The Organization has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, the Organization is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. The Organization has corrected this administrative issue and is committed to maintaining compliance through ongoing audits. View of Responsible Officials and Corrective Action Plan - Chaldean American Ladies of Charity has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, CALC is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. CALC has corrected this administrative issue and is committed to maintaining compliance through ongoing audits.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 21.027, Barrier Removal and Employment Success Expansion Grant Federal Award Identification Number and Year: BRES 24-16 Finding Type – Material weakness in internal control over compliance Repeat Finding – No Criteria – Per 2 CFR § 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – During our testing over reporting, we noted instances in which there was no evidence of review and/or approval. Neither of the two quarterly reports selected for testing had no evidence of review or approval. Questioned Costs – None Cause/Effect – Client reported that they were not aware that they needed to keep records of proof of review. As a result, certain submitted reports could have been misstated. Recommendation – We recommend management increase awareness of federal program compliance requirements and monitor compliance with the requirements on regular basis. In addition, we recommend that management review its procedures and controls in place to ensure that reports have proper evidence of review and approval. View of Responsible Officials and Corrective Action Plan – The Organization has corrected the findings and developed an approval process that time stamps and records proof of review and approval by CEO of all federal and state grant proposals and reports. Going forward, the Organization is ensuring all management has full awareness of all federal and state grant compliance procedures and controls, reviewing federal and state regulations at monthly Grants and Development Meetings to adjust accordingly. The Organization has corrected this administrative issue and is committed to maintaining compliance through ongoing audits.
Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 93.623 Federal Program Titles: Basic Center Grant Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal controls over federal awards. Furthermore, 2 CFR 200.403(g) requires that costs be adequately documented in order to be allowable under federal awards. Condition: During our testing of expenditures charged to the major program, we noted multiple instances that did not contain documented evidence of review or approval by a supervisor or program manager. Questioned Costs: None. Context: During our testing of ten expenditures charged to the major program, we noted three instances that did not contain documented evidence of review or approval by a supervisor or program manager. Although management stated that expenditures are reviewed before processing, no signatures, initials, timestamps, or electronic workflow logs were retained to demonstrate the review occurred. Effect: Failure to document review and approval increases the risk that unallowable or erroneous expenditures could be charged to the federal award and go undetected. Although no unallowable costs were identified in our testing, the control deficiency could lead to future noncompliance or questioned costs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization enforce policies requiring all expenditures charged to federal programs to be reviewed and approved by an appropriate official, and document the approval through dated signatures, electronic approvals, or maintained audit trails in software utilized by the Organization. Views of Responsible Officials: Management agrees with the finding.
2024-001 Suspension and Debarment 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: SLFRP1447; 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. Condition: For the one covered transaction tested, the County did not maintain documentation of verification that the vendor was not suspended or debarred prior to entering into the covered transaction. Questioned Costs: None. Context: The County entered into one covered transaction during the year using COVID-19 – Coronavirus State and Local Fiscal Recovery Funds. The vendor tested was not listed as suspended or debarred on SAM.gov at the time of the audit. Effect: Failure to verify vendors are not suspended, debarred, or otherwise excluded prior to entering into a covered transaction may result in the County entering into a transaction with a vendor that is not authorized to provide goods and services under the grant. Cause: The County informed us that it is their practice to perform the SAM.gov search; however, the results of the suspension and debarment search were not retained for this vendor. Recommendation: We recommend the County maintain documentation to demonstrate that vendors were not debarred, suspended or otherwise excluded from conducting business with the County; the County should complete this documentation prior to entering into a covered transaction. View of Responsible Official: Concur
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): CY2021 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 2023-001. 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 City was classified as a metropolitan city with a population below 250,000 residents that received an allocation of more 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 quarterly reports were to cover one calendar quarter and must be submitted to the Treasury by the last day of the month following the end of the period covered. The City submitted four P&E reports during the audit period; however, the internal controls in place were not effective to prevent, or detect and correct, errors. As a result, errors in reporting were identified. The current period and cumulative expenditures reported consisted of the amounts expended by the beneficiaries who were awarded funds from the City, rather than total amounts expended to the beneficiaries, resulting in current period expenditures and cumulative expenditures being incorrectly reported on three of the four reports as follows: Quarterly Report: October 1, 2023 to December 31, 2023 Current period expenditures were overstated by $666,417. Cumulative expenditures were understated by $964,879. Quarterly Report: January 1, 2024 to March 31, 2024 Current period expenditures were overstated by $860,312. Cumulative expenditures were understated by $104,567. Quarterly Report: April 1, 2024 to June 30, 2024 Current period expenditures were overstated by $104,567. The lack of effective 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 or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds, . . ." 2 CFR 200.1 states in part: ". . . Expenditures means charged made by a non-Federal entity to a project or program for which a Federal award was received. . . . (2) For reports prepared on a cash basis, expenditures are the sum of: (i) Cash disbursements for direct charges for property and services; (ii) The amount of indirect expense charged; (iii) The value of third-party in-kind contribution applied; and (iv) The amount of cash advance payments and payments made to subrecipients. . . ." Cause The City's oversight process for filing the P&E reports for the period of October 1, 2023 to September 30, 2024, did not detect errors in the P&E reports. The City's understanding was that the expenditures in its report should be based on when the beneficiaries expended the funds and not when the City disbursed the funds to the beneficiaries. The City officials did not understand the requirements until the prior audit was finished, which was after multiple of these reports had already been submitted. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the City did not report cumulative expenditures and current period expenditures properly when filing the P&E reports for periods from October 1, 2023 to September 30, 2024. 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. 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 City develop policies and procedures to ensure the City provides the Treasury with complete and accurate information as it relates to the City in its P&E reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 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 Number): FY2024 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-002. Condition and Context Prior to entering into subawards and covered transactions with 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. A population of two covered transactions was identified, and both were selected for testing. The County had procedures in place to verify that the persons and entities related to each of the covered transactions were not suspended, debarred, or otherwise excluded; however, there was no review or approval process documented for us to verify that an internal control system was designed and operating properly. 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 Before the prior audit, the County had not designed or implemented policies and procedures to verify that contractors were not suspended or debarred or otherwise excluded from participating in federal programs. While these procedures were subsequently implemented, the individual who implemented the procedures was not aware of the requirement to document a review or approval process. Effect Without a proper system of internal controls in place, material noncompliance could have gone undetected. Material noncompliance with this requirement could have resulted in funds being disbursed to vendors who were suspended or debarred from receiving federal funds. Any program funds the County used to pay contractors that have been suspended or debarred would be unallowable and questioned costs, and the funding agency could potentially recover the funds. 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 procedures in place are properly implemented for all persons and entities 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.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Award Identification Number and Year: H79TI080845 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: January 1, 2024 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform Grant Guidance (2 CFR 200.303) requires non-Federal 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: The Organization submitted the financial report after the required due date and the performance report did not have evidence of review or approval. Questioned costs: None Context: During our testing, we identified the financial report was submitted after the required due date and the performance report did not have evidence of review or approval. Cause: The Organization did not submit financial report timely and performance report did not have evidence of control. Effect: The Organization did not meet the reporting requirements for submitting financial reports timely. Additionally, one performance report did not have evidence of a review performed. Repeat Finding: No Recommendation: We recommend the entity evaluate its procedures and implement an additional control to ensure reports are submitted timely and reviewed prior to submission.
FINDING 2024-001 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 Number): ARP Act 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 2023-001. Condition and Context During the audit period, COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) totaling $5,647,762 were expended under the water, sewer, and broadband eligible use categories. All of the transactions were subject to suspension and debarment provisions. Prior to entering into subawards and covered transactions with the 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 entity, or adding a clause or condition to the covered transaction with that person. The City's policies related to suspension and debarment requirements included the Executive Secretary of the Engineering and Board of Works (Executive Secretary) verifying the SAMS exclusions. The City entered into one contract with one vendor for one project under the water, sewer, and broadband eligible use category during the audit period. Total payments made to the vendor during the audit period were $5,647,762, all of which were subject to suspension and debarment requirements. Per inquiry with the City, the Executive Secretary verified the vendor was not suspended or debarred by checking the SAMs exclusions; however, documentation of the verification was not retained. As such, we could not determine if the City complied with the suspension and debarment requirements. 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 A proper system of internal controls was not implemented by management of the City. Policies over suspension and debarment requirements were in place; however, the procedures did not address the retention of documentation. As such, the City was unable to provide documentation to demonstrate they checked SAM.gov to verify that the contractor was not suspended or debarred prior to payment. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure 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 request repayment of funds previously provided to the City. Furthermore, noncompliance with the provisions of federal statutes, regulations, and 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 that management of the City strengthen its system of internal controls to ensure that all contractors paid $25,000 or more, all in or in part with federal funds, are not suspended, debarred, or otherwise excluded from participating in federal programs and ensure appropriate supporting documentation for federal programs is retained for audit. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-002 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): ARP Act Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion 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 City was classified as a city with a population below 250,000 residents that received an allocation of more than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. The quarterly reports were to cover one calendar quarter and must be submitted to the Treasury by the last day of the month following the end of the period covered. The City submitted all required P&E reports during the audit period. The internal controls in place were not effective and did not prevent, or detect and correct, errors in the P&E reports prior to submission. All four quarterly reports submitted contained errors; obligations and expenditures were understated by the following amounts: Current Current Period Cumulative Period Cumulative Obligation Obligation Expenditure Expenditure 2023 Q4 P&E Report $ 79,009 $ 89,009 $ 79,009 $ 89,009 2024 Q1 P&E Report 379,005 89,009 379,005 468,014 2024 Q2 P&E Report 1,331,499 79,009 1,331,499 468,014 2024 Q3 P&E Report 2,208,957 79,009 2,208,957 468,014 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 200.328 states: "Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMB-approved common information collections, as applicable, when providing financial and performance reporting information." 31 CFR 35.4(c) states: "During the period of performance, recipients shall provide to the Secretary or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary or her delegate, as applicable, may require for the administration of this section. In addition to regular reporting requirements, the Secretary may request other additional information as may be necessary or appropriate, including as may be necessary to prevent evasions of the requirements of this subpart. False statements or claims made to the Secretary may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in Federal awards or contracts, and/or any other remedy available by law." Cause The City's management did not have effective internal controls in place to ensure proper amounts were reported prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City strengthen its system of internal controls over the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are effective in preventing, or detecting and correcting, noncompliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria or specific requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal recipients and subrecipients must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance the award is in compliance with the Federal Statutes, regulations, and the terms and conditions of the Federal award. Condition: The City's Annual Reports were prepare and submitted by the same individual. The was no additional level of review before submitting. Questioned costs: No Context: The Annual Report is prepared and submitted by the same indivdual with no approver. Cause: The City did not have a control in place surrounding review of the Annual Report prior to submission. Effect: Lack of approval could result in misstatement of federal funds being submitted. Repeat Finding: No Recommendation: We recommend that the Annual Report be approved by someone other than preparer prior to submisson. View of responsible officials: There is no disagreement with the audit finding.
Finding 2024-004 Insufficient Documentation Supporting Eligibility Determination Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance Condition: The Organization uses a database to collect and store documentation related to eligibility determinations for program participants. While this tool was used consistently throughout the year, the audit identified a lack of documented review procedures to verify that eligibility criteria were appropriately assessed and that all required documentation was obtained and retained. There is no established process to review or confirm the completeness and accuracy of eligibility documentation within the database. As a result, three of the sixty transactions tested did not include sufficient documentation to support eligibility determinations, representing instances of noncompliance with the eligibility requirements under the federal program. Criteria: According to Uniform Guidance 2 CFR §200.303(a), the Organization is required to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, per the federal grant award document, the eligibility documentation files must be maintained until three years has elapsed from the las payment under the grant. Cause: The deficiency appears to stem from an underdeveloped system of internal control surrounding the eligibility determination process. Although the Organization adopted a digital solution to facilitate documentation, it did not implement corresponding review or monitoring controls to ensure compliance. In addition, the absence of documented policies or assigned responsibilities contributed to gaps in oversight and follow-through. Possible of Known Effect: Due to the lack of review procedures and internal control mechanisms, the Organization did not retain adequate documentation to support eligibility determinations in 3 out of 60 transactions tested. This resulted in known compliance findings under the eligibility requirements of the federal program. In the auditor’s judgment, the combination of the control deficiencies and noncompliant transactions indicates that the Organization did not have a system of internal control in place capable of providing reasonable assurance of compliance with federal eligibility requirements, as required under 2 CFR 200.303 and the applicable program-specific provisions. Questioned Costs: Known questioned costs of $270 were identified. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization enhance its internal control structure over eligibility determination by implementing a formal review process to verify that all required documentation is obtained, reviewed, and retained in the system. Responsibilities for eligibility review should be clearly assigned, and staff should be trained to ensure that documentation standards are consistently met. Periodic quality checks or file reviews may help reinforce compliance and identify any gaps before claims are submitted or services are rendered. Views of Responsible Officials: The Organization will transition to Pantry Soft, a new CRM to centralize client records, eligibility documentation and service dates. We will include mandatory eligibility fields and document upload requirements before service can be recorded. We will develop a standardized eligibility checklist to be completed for all new and returning participants. Staff will be trained on Pantry Soft usage, eligibility requirements and document retention stands.
Allowable Activities Type of Finding - Significant deficiency in internal control over compliance Program: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Agency: U.S. Department of Treasury Criteria - In accordance with 2 CFR 200.303 subrecipients must establish, document, and maintain effective internal control over federal awards that provides reasonable assurance that the subrecipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition - During compliance testing, it was identified that one expenditure in the sample selection was not allowable under the grant agreement. Cause - The expenditure had been reviewed, approved, and manually coded to the appropriate program, however the expenditure was entered into the accounting system under the wrong program. There was no comparison of the coding within the accounting system to the approved coding on the related support. Effect - Grant funds were allocated to an unallowed activity. Questioned Costs - $257. Context - Out of a sample of 21 expenditures totaling $266,209, one expenditure totaling $257 was determined to be an unallowed activity under the Coronavirus Relief Fund and related grant agreement. Identification as a repeat findings - This is not a repeat finding. Recommendation - We recommend management implement a periodic review of grant expenditures entered into the accounting system to ensure coding is consistent with approved programs. Views of responsible official - Management concurs with the finding. The Organization is working with its outsourced accounting firm to make the necessary changes or updates in processes and controls. See the corrective action plan.
Reporting Type of Finding - Noncompliance and material weakness in internal control over compliance Program: Coronavirus Relief Fund Assistance Listing Number: 21.019 Federal Agency: U.S. Department of Treasury Criteria - In accordance with 2 CFR 200.303 subrecipients must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the subrecipient is managing the federal award in compliance and federal statutes, regulations and the terms and conditions of the federal award. In accordance with 2 CFR 200.329 subrecipients must submit performance reports as required by the federal award. Reports submitted semiannually are due no later than 30 calendar days after the reporting period. Condition - Total expenditures reported on the semiannual reports due April 30, 2024 and October 31, 2024 did not agree to related support. The semiannual report due on October 31, 2024 was not submitted timely. Cause - The reports were prepared on a cash basis and the reports were not being monitored for timely submission. Effect - The Association submitted reports that were not on the accrual basis which caused expenditures to be reported in the incorrect period and submitted one report untimely. Questioned costs - No questioned costs. Context - The Association is required to report to the City of Topeka, Kansas semiannually. We tested both reports due during 2024. The report due April 30, 2024 covered the period October 1, 2023 through March 31, 2024 and reported cash expenditures of $19,675. Internal records of the Organization supported accrual expenditures of $29,678 during the same time period. Expenditures were under-reported by $10,003 on the report due April 30, 2024. The report due October 30, 2024 covered the period April 1, 2024 through September 30, 2024 and reported cash expenditures of $60,902. Internal records of the Organization supported accrual expenditures of $54,726 during the same time period. Expenditures were over-reported by $6,176 on the report due October 30, 2024. This same report was submitted February 25, 2025 when the due date was October 30, 2024. Identification as a repeat finding - This is a repeat finding. See 2023-002. Recommendation - We recommend that management review reporting requirements and internal procedures to ensure expenses are reported accurately, completely, and timely using an accrual basis. There should be a review of the reports prior to submission that includes a comparison to internal accrual-based records and monitoring to ensure the reports are submitted timely. Views of responsible official - Management concurs with the finding. The Organization is reviewing its reporting procedures and providing education on requirements to those involved. See the corrective action plan.
FINDING 2024-002 Subject: Medicaid Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Federal Agency: Department of Health and Human Services Federal Program: Medical Assistance Program Assistance Listings Number: 93.778 Federal Award Number and Year (or Other Identifying Number): 100288480A Pass-Through Entity: Indiana Family and Social Services Administration Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Audit Finding: Material Weakness Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context The Township had not properly designed or implemented a system of internal controls which would include appropriate segregation of duties that would likely be effective in preventing, or detecting and correcting, material noncompliance related to expenditures made from the Medicaid Cluster. The Medicaid Cluster consists of three federal programs. However, the Township received funding from only one program, the Medical Assistance Program. The Medical Assistance Program grant funding is provided by the Indiana Family and Social Services Administration to Freestanding Governmental Ambulance Providers, such as the Township, based on a Cost Report for funding. The Cost Report for funding utilizes all costs associated with the operation of the Township's ambulance program in conjunction with other metrics such as ambulance runs, total charges, and Medicaid charges to determine the federal ambulance payment adjustment, the amount received by the Township. The Township utilized its Fire Fighting Fund to account for both fire and ambulance services. Costs were allocated between fire and ambulance services as necessary. Expenditures related to ambulance services were included in the Township's Cost Report to determine the reimbursement due to the Township. The funding received during the audit period was based on expenditures and data from January 1, 2021 through December 31, 2021, and, as such, internal controls for that period were reviewed. The Cost Report for the Medicaid Program was prepared by the Township's contracted CPA firm using information provided by the Township. The Township provided expenditure data, reports detailing run data, and charges (both Medicaid and non-Medicaid) to the CPA firm. The CPA firm prepared and submitted the report. The Township did not participate in the preparation or submission process, nor complete a review of the report prior to submission. As such, the Township could not ensure that the information provided was properly utilized or that the report was accurate. 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). . . ." The Indiana State Board of Accounts (SBOA) is required under Indiana Code 5-11-1-27(e) to define the acceptable minimum level of internal control standards. To provide clarifying guidance, the State Examiner compiled the standards contained in the manual, Uniform Internal Control Standards for Indiana Political Subdivisions. All political subdivisions subject to audit by SBOA are expected to adhere to these standards. The standards include adequate control activities. According to this manual: "Control activities are the actions and tools established through policies and procedures that help to detect, prevent, or reduce the identified risks that interfere with the achievement of objectives. Detection activities are designed to identify unfavorable events in a timely manner whereas prevention activities are designed to deter the occurrence of an unfavorable event. Examples of these activities include reconciliations, authorizations, approval processes, performance reviews, and verification processes. An integral part of the control activity component is segregation of duties. . . . There is an expectation of segregation of duties. If compensating controls are necessary, documentation should exist to identify both the areas where segregation of duties are not feasible or practical and the compensating controls implemented to mitigate the risk. . . ." Cause A proper system of internal controls over the Activities Allowed or Unallowed, the Allowable Costs/Cost Principles, and the Reporting compliance requirements for the Medicaid Cluster expenditures was not designed by management of the Township, which would include segregation of key functions to ensure Medicaid Cluster funds were being used appropriately. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Township's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. The Township first became aware of this internal control deficiency during the 2022 audit; however, since the expenditure reimbursements by the awarding agency are on a three-year cycle, the reimbursements received in 2024 were for submissions made for 2021 reporting. During 2021, the Township was unaware of the lack of internal controls. 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. 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 Township. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Township's management design and implement a proper system of internal controls including policies and procedures that would include segregation of duties for the preparation and approval of expenditure reports to ensure the accuracy of such reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: Choice Neighborhoods Implementation Grants, Assistance Listing #14.889, 2024, U.S. Department of Housing and Urban Development, Office of Community Planning and Development. COVID-19 - Coronavirus State and Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. Also, 2 CFR 180 prohibits non-Federal entities from entering into covered transactions with suspended or debarred entities.’t t Condition: The City failed to establish and maintain effective controls over suspension and debarment. The City failed to provide evidence the City verified vendor’s suspension and debarment status prior to procurement. Effect: The City of Shreveport risks not being in compliance with their federal funding procurement compliance requirements. Cause: Purchasing Department/Management failed to follow City Procurement Policy and Procedure when contracting vendors. Questioned Costs: Not applicable Context: The issue was identified in a sample of 25 disbursements for each major program. Recommendation: We recommend the City follows their Procurement Policy when ensuring vendor status prior to contracting services. Views of responsible officials and corrective action plan: The City will strengthen the controls over the vendor debarment and suspension status review during the procurement process with the following steps: (1) the Finance Purchasing Division will communicate with the City Departments receiving federal awards to ensure the contracts are routed through Purchasing for verification of debarment and suspension compliance; (2) the Finance Purchasing Division will run a contract audit report periodically to review the Department contract documents for compliance; and (3) throughout the year, the Finance Department will review the grant expenditures for vendor activity not meeting requirements.
Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: Choice Neighborhoods Implementation Grants, Assistance Listing #14.889, 2024, U.S. Department of Housing and Urban Development, Office of Community Planning and Development. COVID-19 - Coronavirus State and Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. Also, 2 CFR 180 prohibits non-Federal entities from entering into covered transactions with suspended or debarred entities.’t t Condition: The City failed to establish and maintain effective controls over suspension and debarment. The City failed to provide evidence the City verified vendor’s suspension and debarment status prior to procurement. Effect: The City of Shreveport risks not being in compliance with their federal funding procurement compliance requirements. Cause: Purchasing Department/Management failed to follow City Procurement Policy and Procedure when contracting vendors. Questioned Costs: Not applicable Context: The issue was identified in a sample of 25 disbursements for each major program. Recommendation: We recommend the City follows their Procurement Policy when ensuring vendor status prior to contracting services. Views of responsible officials and corrective action plan: The City will strengthen the controls over the vendor debarment and suspension status review during the procurement process with the following steps: (1) the Finance Purchasing Division will communicate with the City Departments receiving federal awards to ensure the contracts are routed through Purchasing for verification of debarment and suspension compliance; (2) the Finance Purchasing Division will run a contract audit report periodically to review the Department contract documents for compliance; and (3) throughout the year, the Finance Department will review the grant expenditures for vendor activity not meeting requirements.
Federal Program, Assistance Listing # and Year, Federal Agency, Pass-Through Entity: COVID-19 - Coronavirus State & Local Fiscal Recovery Fund, Assistance Listing #21.027, 2021, U.S. Department of Treasury. Criteria or Specific Requirement: In accordance with 2 CFR 200.1, all recipients of federal funds must complete and submit annual project and expenditure reports on all SLFRF funded projects. Also, 2 CFR 200.303 requires the entity to establish and maintain effective internal controls over compliance with respect to federal awards and Section 1111(b)(2)(A) of the ESEA for compliance accountability. Proper internal controls require supporting documentation to be retained as evidence for effectiveness of the controls in place. In accordance with 2 CFR.307, program income earned during the period of performance must be used in accordance with the terms and conditions of the federal award. Condition: During our testing, CRI identified a lack of internal controls related to reviewing and approving report submissions. During our testing, CRI identified 2024 report submissions did not agree to cumulativeto- date expenditures of the fiscal years 2021-2024. During our testing, CRI identified revenue recognized/earned during the period was improperly reported as program income and expenditures were improperly included as program income expenditures, causing inaccurate reporting. Program income was materially overstated. Effect: The City of Shreveport risks reports required to be submitted to the U.S. Department of the Treasury to be materially misstated. Cause: A lack of adequate controls over reporting requirements. Questioned Costs: Not applicable Context: The issue was identified while testing the population of reports. Recommendation: We recommend the City implements proper controls to review reports submitted, so as to identify and address any discrepancies. Views of responsible officials and corrective action plan: Accounting has reviewed all projects and Ordinances related to ARPA and has updated reports and records to fully account for ARPA funding. From the Chief Administrative Officer (CAO) and the department responsible for a specific project that has multiple funding sources, confirmation was obtained on what amounts were obligated ARPA funds. This strengthens the controls over the report submission process to ensure the reported amounts are accurate and reconciled properly.
FINDING 2024-001 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 Number): 2024 Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Condition and Context Prior to entering into subawards and covered transactions with the COVID-19 - 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. An internal control system was not in place at the City to ensure compliance with the Procurement and Suspension and Debarment compliance requirement. A population of nine covered transactions that equaled or exceeded $25,000 paid from SLFRF award funds received from the U.S. Department of the Treasury was identified. Three covered transactions were selected for testing. The City had procedures in place to verify that the persons and entities related to each of the three covered transactions were not suspended, debarred, or otherwise excluded; however, one person was responsible for verifying compliance, without an oversight, review, or approval process in place. 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 The City's procedures to verify vendors' suspension or debarment status were not adequate, as only one employee was involved in this process, with no oversight. City officials were not aware that a second review was necessary for suspension and debarment requirements. Effect Without the proper design or implementation of internal controls, the City cannot ensure 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 the funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls to ensure that the current procedures in place are properly implemented for all persons and entities 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 2024-002 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 Number): SWIF224703 Pass-Through Entity: Indiana Finance Authority Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Condition and Context Prior to entering into subawards and covered transactions with the COVID-19 - State and Local Fiscal Recovery Funds (SLFRF), 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 adequate policies or procedures in place for verifying that an entity with which it planned to enter into a covered transaction is not suspended, debarred, or otherwise excluded. A population of one covered transaction, totaling $450,688, that equaled or exceeded $25,000 paid from SLFRF funds received from the Indiana Finance Authority was identified and selected for testing. The City did not verify the vendor's suspension or debarment status prior to payment due to the City's lack of internal controls over the compliance requirement. One person was responsible for verifying compliance without an oversight, review, or approval process in place. 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 City's procedures to verify vendors' suspension or debarment status were not adequate as only one employee was involved in this process with no oversight. City officials involved in this project were not aware of this compliance requirement for this grant. Effect Without the proper design or implementation of internal controls, the City cannot ensure 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 the funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls to ensure that the current procedures in place are properly implemented for all persons and entities 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 2024-001 Subject: Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs - Equipment and Real Property Management Federal Agency: Department of Transportation Federal Program: Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs Assistance Listings Number: 20.106 Federal Award Number and Year (or Other Identifying Number): 3-18-0047-033-2024 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context Detailed property records are to be maintained when equipment having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds $5,000 is purchased with federal awards. The property records should contain the equipment description (including serial number or other identification number), source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. One piece of equipment was purchased with Airport Improvement Program funds totaling $216,250. However, the equipment was not included in the Authority's property records (capital asset listing), nor did the records contain all the required information listed above. In addition, the Authority did not perform a complete physical inventory within the last two years as required. 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 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause Internal controls were not designed to ensure compliance with equipment management requirements as the Authority was unaware of the procedures needed. Effect Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of federal funding to the Authority. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the Authority's management strengthen its system of internal controls to ensure compliance with equipment management requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 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 2023 Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion 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 City was classified as a metropolitan city 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 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, April 1 through March 31, and must be submitted to the Treasury by April 30 each year. The City submitted one P&E report during the audit period. The internal controls in place were not effective and did not prevent, or detect and correct, errors in the P&E report prior to submission. As a result, the Current Period Obligation and Current Period Expenditure amounts for Project Identification Numbers 0022.0000 and 0.24 were each overstated by $298,172 and $1,490,414, respectively. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF PORTAGE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 The City's management did not have effective internal controls in place to ensure proper amounts were reported prior to submission. The City had established Project Identification Numbers based on the City's calendar year expense amounts. However, the City's calendar year, January 1 to December 31, differed from the P&E annual report calendar year, April 1 through March 31. This resulted in Project Identification Number 0022.0000 Current Period Obligation and Current Period Expenditures not to be reduced to zero and Project Identification Number 0.24 Current Period Obligation and Current Period Expenditures amounts to include $1,490,414 of January 1 through March 31, 2023, expenditures that were outside the P&E annual report that was due April 30, 2024, parameters. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City strengthen its system of internal controls over the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are effective in preventing, or detecting and correcting, noncompliance. 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 Significant deficiency in internal control over compliance with allowable costs meeting the requirements of 2 CFR Part 200. Federal Agency: U.S. Department of Commerce Program Title: Economic Adjustment Assistance Program Assistance Listing Number: 11.307 Award Number: MDM9F73QJ1Z1 Criteria Organization policy and Uniform Guidance (2 CFR 200.303) require that all nonpayroll disbursements be supported by documented approval from an authorized official prior to payment to ensure proper internal control over federal funds. Condition/Context During our testing of 21 nonpayroll disbursements, we noted that 9 disbursements lacked evidence of the required approval by an authorized official. Cause During the year, the Organization implemented a new financial system. As a result of the system change, all supporting data for nonpayroll disbursements was lost prior to the conversion and could not be recovered or reconstructed. Effect Failure to document approvals increases the risk of unauthorized or improper disbursements and noncompliance with internal control policies, which could result in questioned costs or loss of federal funding Questioned Costs None identified. Recommendation We recommend the Organization reinforce its procedures and implement controls to ensure that supporting documentation is retained and properly migrated during system changes, and that all nonpayroll disbursements are properly approved and documented in accordance with policy and federal requirements Views of Responsible Individual and Corrective Action Plan Management agrees with the finding and has provided the accompanying corrective action plan.
Department of Homeland Security, State of Illinois Office of Emergency Management, Federal Financial Assistance Listing 97.036, 4728‐DR‐IL Disaster Grants – Public Assistance Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: Materials expenditures were claimed for reimbursement with no documented formal review and approval. Cause: The Cooperative did not retain documentation to support the review and approval over material costs claimed for reimbursement under the program. Effect: Without a formal documentation of review of expenses, demonstrating the expenditures comply with federal regulations is difficult. Questioned Costs: No questioned costs over $25,000. Context/Sampling: Nonstatistical sampling was used. Sample size was 60 transactions which accounted for $1,925,243 out of $2,310,004 of federal program expenditures of which $1,736,952 was submitted for reimbursement. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review the process for documenting the review and approval over material costs. Views of Responsible Officials: Management agrees with the finding.
2024-002. Failure to Maintain Accurate Accounting Records for Federal Awards Criteria: Title 2 U. S. Code of Federal Regulations (CFR) Section 200.303, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires the recipient of federal awards to establish and maintain internal control over federal awards that provide reasonable assurance that the recipient is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. One of the objectives of internal control over compliance is to ensure that federal transactions are properly recorded and accounted for in the accounting records in order to permit the preparation of reliable financial statements, including the Schedule of Expenditures of Federal Awards. Condition: Federal grant revenues in the amount of $270,907 were not properly recorded in the accounting records. Cause: Undetermined. Effect: Federal award transactions could be improperly reported in the financial statements and the Schedule of Expenditures of Federal Awards. Recommendation: All future federal grant revenue should be properly recorded in the accounting records.
Finding 2024-001: Rural Rental Housing Loans Assistance Listing Number: 10.415 U.S. Department of Agriculture Compliance Requirement: Eligibility Type of finding: Internal Control Over Compliance (significant deficiency) Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity 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 (2 CFR 200.303(a)). Condition: The Organization did not implement a review or monitoring process to ensure propriety in eligibility determinations and tenant lease agreements for the period June 2024 – December 2024. Specifically, there was no review of eligibility determinations and tenant lease agreements for 8 of 12 tenant files reviewed. Cause: The Administrative Assistants took over completing all tenant eligibility determinations after the previous Executive Director retired in May 2024 resulting in a lack of separate review. Effect: Noncompliance with the Rural Rental Housing Loan requirements may exist and not be detected by the Organization. Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of the Executive Director and Alamosa Administrative Assistant to provide for a review process of tenant eligibility determinations. Grantee’s Response: See corrective action plan.
Finding 2024-001: Rural Rental Housing Loans Assistance Listing Number: 10.415 U.S. Department of Agriculture Compliance Requirement: Eligibility Type of finding: Internal Control Over Compliance (significant deficiency) Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity 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 (2 CFR 200.303(a)). Condition: The Organization did not implement a review or monitoring process to ensure propriety in eligibility determinations and tenant lease agreements for the period June 2024 – December 2024. Specifically, there was no review of eligibility determinations and tenant lease agreements for 8 of 12 tenant files reviewed. Cause: The Administrative Assistants took over completing all tenant eligibility determinations after the previous Executive Director retired in May 2024 resulting in a lack of separate review. Effect: Noncompliance with the Rural Rental Housing Loan requirements may exist and not be detected by the Organization. Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of the Executive Director and Alamosa Administrative Assistant to provide for a review process of tenant eligibility determinations. Grantee’s Response: See corrective action plan.
Finding 2024-001: Rural Rental Housing Loans Assistance Listing Number: 10.415 U.S. Department of Agriculture Compliance Requirement: Eligibility Type of finding: Internal Control Over Compliance (significant deficiency) Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity 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 (2 CFR 200.303(a)). Condition: The Organization did not implement a review or monitoring process to ensure propriety in eligibility determinations and tenant lease agreements for the period June 2024 – December 2024. Specifically, there was no review of eligibility determinations and tenant lease agreements for 8 of 12 tenant files reviewed. Cause: The Administrative Assistants took over completing all tenant eligibility determinations after the previous Executive Director retired in May 2024 resulting in a lack of separate review. Effect: Noncompliance with the Rural Rental Housing Loan requirements may exist and not be detected by the Organization. Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of the Executive Director and Alamosa Administrative Assistant to provide for a review process of tenant eligibility determinations. Grantee’s Response: See corrective action plan.
Finding 2024-002: Lower Income Housing Assistance Program - Section 8 New Construction and Substantial Rehabilitation Assistance Listing Number: 14.182 U.S. Department of Housing and Urban Development (Repeat of Finding 2023-002 and 2022-002) Compliance Requirements: Cash Management, Eligibility, Reporting, Special Tests and Provisions Type of finding: Internal Control Over Compliance (significant deficiency) Criteria: The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require that the non-Federal entity 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 (2 CFR 200.303(a)). Condition: The Organization has not implemented a review or monitoring process to ensure propriety in eligibility determinations, tenant lease agreements, housing assistance payment requests, and return of funds for vacant units and rent adjustments to contract rent included on the monthly Housing Assistance Payment vouchers. Cause: The compliance responsibilities of the Organization are performed by one person which has made it difficult to establish a proper review process over cash management, eligibility, reporting, and special tests and provisions requirements. Effect: Noncompliance with the Lower Income Housing Assistance Program - Section 8 New Construction and Substantial Rehabilitation requirements may exist and not be detected by the Organization. Recommendation: The Organization should strengthen its internal controls with adopted policies and procedures to ensure a review process is established through adequate segregation of duties. The Organization should consider assessing and realigning the duties and responsibilities of administrative staff allowing the administrator to act in a more supervisory position. Grantee’s Response: See corrective action plan.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2 CFR §2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR §200.303(a) which states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).Furthermore, 2 CFR §200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The “City of Columbus Fiscal Policies and Procedures for the Administration of HUD Grants Manual” Part II Section C – Standards for Documentation of Personal Services provides the following: All grant funded staff (both city staff and subrecipient staff) will utilize personal activity reports (timesheets). All timesheets will reflect total hours worked, identify the federal grant hours worked, and be signed by either the employee or the supervisor. Furthermore, the City of Columbus Department of Development has established a procedure of timesheet review which requires supervisors review employee timesheets within one week of the pay period end date. This review is evidenced by an electronic signature on the employee-completed timesheet.While the City does have an internal control policy in place in accordance with 2 CFR 430(i)(1)(i), supervisors were not always adhering to the policy which resulted in a deficiency in the application of the control process. During payroll control testing over AL #14.239 Home Investment Partnership Program, it was noted 3 out of the 5 selected worklogs (60%) were not signed by the supervisor within the one-week requirement as required by City policy. Supervisory sign offs occurred between 12 and 32 working days (not including weekends) following the end of the pay period.Failure to follow the established internal control policy and ensuring all time sheets are appropriately approved by a knowledgeable supervisor, within one week of the pay period end date, could result in unallowable costs being allocated to a federal program and could ultimately result in noncompliance and/or a questioned cost. The City should review established policies and procedures with supervisory personnel and evaluate if additional control procedures should be in place to ensure all timesheets are appropriately reviewed timely prior to allocation to a federal program.
2024-001 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Assistance Listing No. 21.027 Significant Deficiency in Internal Control Over Compliance – Appropriate Internal Control Structure Related to Compliance Requirements I. Procurement and Suspension and Debarment Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that CICP must, among other things, “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)”. Condition and Context: We noted CICP did not complete their procurement checklist timely for one specific vendor, in accordance with their written policies. The procurement checklist is CICP’s key control for monitoring procurement and suspension and debarment of vendors. The vendor relationship was an existing relationship, but the vendor had not previously been used for any activities related to federal awards. CICP had other written documentation which provided evidence they followed their procurement process; however, no written documentation was maintained indicating suspension or debarment was reviewed prior to using the vendor for activities related to the federal award. Cause and Effect: Not completing the procurement checklist timely could result in noncompliance related to procurement and suspension and debarment. Recommendation: We recommend the procurement checklist be completed in line with the written policies of CICP. Views of Responsible Officials and Planned Corrective Action: CICP agrees with the recommendation and it was implemented effective 2/14/2025.
Finding 2024-005 – Internal Controls over Federal Awards (Significant Deficiency and Noncompliance)( Repeat finding) Information on the Federal Program: U.S. Department of Justice, Assistance Listing No.16.575 Victims of Crime Act (VOCA) Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: We selected 50 disbursements for testing. Of those 50, 25 were for payroll and 25 were non-payroll disbursements. Of the 25 non-payroll, 4 lacked documentation of approval for payment.Cause: The Organization did not properly document controls established in its accounting manual to review and approve expenses charged to the grant. Effect: The Organization did not obtain proper approvals according to the policy of established controls. Questioned costs: None Recommendation: We recommend the Organization strengthen its policies and procedures surrounding disbursement and allocation processes to document the review and approval process to meet the control standards. Views of Responsible Officials: Management agrees with this finding. See Management’s View and Corrective Action Plan included at the end of the report.
Finding 2024-001 Reporting Criteria: Pursuant to 2 CFR section 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Revolving Loan Fund (RLF) recipients must administer RLFs in accordance with an RLF Plan approved by EDA. Pursuant to 13 CFR 307.14 (a) All RLF Recipients, including those receiving Recapitalization Grants for existing RLFs, must complete and submit an RLF report, using Form ED-209, in a format and at a frequency as required by EDA. Pursuant to 13 CFR 307.14 (b) All RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan and that the information provided is complete and accurate. Condition: There were no adequate internal controls to identify and correct material misstatements in key line items in the Form ED-209, Revolving Loan Fund Financial Report (report) for the Legacy or Cares Revolving Loan Funds or submit the reports timely. The key line items contain critical information and should reconcile to the Authority's financial documents and account balances. Cause: The current internal control system in place was not adequate to ensure: loan reporting procedures were followed in accordance with the RLF Plan approved by the EDA. Effect: The reports do not contain accurate information. This is a repeat finding of 2023-001. Recommendation: We have the following recommendations: 1) the Authority should implement procedures to ensure that the RLF program is administered in accordance with the plan approved by the EDA, 2) the Authority should implement procedures to ensure that required reports are reviewed for accuracy prior to being submitted by the due date. View of Responsible Official: Management agrees with the finding. See separate corrective action plan.
Finding 2024-001 Reporting Criteria: Pursuant to 2 CFR section 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Revolving Loan Fund (RLF) recipients must administer RLFs in accordance with an RLF Plan approved by EDA. Pursuant to 13 CFR 307.14 (a) All RLF Recipients, including those receiving Recapitalization Grants for existing RLFs, must complete and submit an RLF report, using Form ED-209, in a format and at a frequency as required by EDA. Pursuant to 13 CFR 307.14 (b) All RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan and that the information provided is complete and accurate. Condition: There were no adequate internal controls to identify and correct material misstatements in key line items in the Form ED-209, Revolving Loan Fund Financial Report (report) for the Legacy or Cares Revolving Loan Funds or submit the reports timely. The key line items contain critical information and should reconcile to the Authority's financial documents and account balances. Cause: The current internal control system in place was not adequate to ensure: loan reporting procedures were followed in accordance with the RLF Plan approved by the EDA. Effect: The reports do not contain accurate information. This is a repeat finding of 2023-001. Recommendation: We have the following recommendations: 1) the Authority should implement procedures to ensure that the RLF program is administered in accordance with the plan approved by the EDA, 2) the Authority should implement procedures to ensure that required reports are reviewed for accuracy prior to being submitted by the due date. View of Responsible Official: Management agrees with the finding. See separate corrective action plan.
Finding 2024.001: Eligibility - Significant Deficiency Grantor: U.S. Department of Agriculture Federal Program Names: WIC Special Supplemental Nutrition Program for Women, Infants and Children Federal Assistance Listing Numbers: 10.557 Federal Award Identification Number and Year: 79194 - 2023, 76709 - 2023 and 88458 - 2024 Name of Pass-through Entity: Indiana State Department of Health Criteria In accordance with 2CFR 200.303(a), Internal Controls, a nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The specific eligibility requirements are unique to each federal program, in accordance with the terms and conditions of the Federal award pertaining to the program. Condition During our testing over eligibility requirements, we were unable to review sufficient documentation to support that benefit recipients were eligible for benefits. Cause The Center's internal controls over eligibility were not consistently followed to ensure the presence of documentation to support that all benefit recipients were eligible for benefits. Effect Lack of sufficient support over eligibility could result in ineligible individuals receiving benefits. Questioned Costs None. Context We selected 40 beneficiaries charged to the federal program to test compliance and controls over eligibility. Out of 40 individuals tested, we noted 4 instances where there was no documentation to support that the benefit recipients were eligible for benefits and the internal controls over eligibility were followed. Identification of Repeat Finding None. Recommendation We recommend that management provide training to those responsible for verifying eligibility to ensure that documentation and internal control over eligibility is maintained. Views of Responsible Officials Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency.