FINDING 2024-003 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23, FY 24 Pass-Through Entity: Indiana Department of Education 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 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $150,000 per Indiana Code. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases of $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases were followed. The School Corporation did not obtain price or rate quotes from multiple vendors for its audit period contract with Coca-Cola. Documentation detailing the history of procurement, including rationale to limit competition at the time of purchase was not provided for audit. Suspension and Debarment Nonfederal entities and contractors are subject to nonprocurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that entity, or adding a clause or condition to the covered transaction with that entity. The School Corporation had not designed or implemented adequate policies or procedures to ensure that applicable vendors who received federal funds over certain thresholds were not suspended or debarred from participating in federal awards programs. There was one vendor (Coca-Cola) subject to suspension and debarment requirements during the audit period that was not procured through the School Corporation's affiliated Educational Services Center for cooperative purchasing. The School Corporation did not perform procedures to ensure the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in federal assistance programs or activities. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to one vendor (and related purchases) for both procurement and 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). . . ." 2 CFR 200.318(i) 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." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (b) A purchasing agent may purchase supplies under this section by inviting quotes from at least three (3) persons known to deal in the lines or classes of supplies to be purchased. (c) The purchasing agent shall mail an invitation to quote to the persons described in subsection (b) at least seven (7) days before the time fixed for receiving quotes. (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 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 intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Superintendent of Schools indicated that alternative vendor(s) had left the local geographical area and no longer attempted to submit quotes or bids for services as it had done in prior years. Additionally, School Corporation officials were unaware of the requirement to verify that all vendors over $25,000 were not suspended or debarred from receiving federal grant funds. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance with the Procurement and Suspension and Debarment compliance requirement could enable small purchases made by the School Corporation to be uncompetitive and could lead to contracting with vendors who are suspended or debarred from receiving federal grant funding. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management strengthen its system of internal controls over small purchase requirements to ensure that an adequate number price or rate quotes are obtained before purchase. Additionally, we recommended that vendors with a single or aggregate transaction amounts over $25,000 per fiscal year are verified for suspension and debarment prior to entering into the transaction and/or contract. 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: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23, FY 24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. The Indiana Department of Education defines "Direct Certification" (DC) as follows: "(DC) is a method to automatically qualify students for free or reduced meals using data from Family and Social Services Administration (SNAP, TANF, and Medicaid) and Department of Child Services (Foster) and matching that with the Local Educational Agency's reported enrollment. Direct Certified households do not need to complete a meal application and will not be included in the verification process because their eligibility has already been verified." Internal controls had not been properly designed and implemented over students receiving free/reduced price meal benefits via DC. The Assistant Food Service Director generated the DC reports on the School Nutrition Program Indiana web portal and entered resulting eligibility determinations into the point-of-sale system (Harmony) without a documented oversight, review or approval in process in place to ensure their accuracy. The lack of internal controls over the DCs 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 School Corporation officials were unaware they should document a review of the DC process by someone other than the Assistant Food Service Director. Effect The lack of an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Eligibility compliance requirement. Verifying the accuracy of students directly certified for benefits in the point-of-sale system will ensure that ineligible students do not receive free or reduced-price meals. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that directly certified students eligible for meal benefits are verified for accuracy in Harmony by someone other than the Assistant Food Service Director. 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: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23, FY 24 Pass-Through Entity: Indiana Department of Education 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 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $150,000 per Indiana Code. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases of $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases were followed. The School Corporation did not obtain price or rate quotes from multiple vendors for its audit period contract with Coca-Cola. Documentation detailing the history of procurement, including rationale to limit competition at the time of purchase was not provided for audit. Suspension and Debarment Nonfederal entities and contractors are subject to nonprocurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that entity, or adding a clause or condition to the covered transaction with that entity. The School Corporation had not designed or implemented adequate policies or procedures to ensure that applicable vendors who received federal funds over certain thresholds were not suspended or debarred from participating in federal awards programs. There was one vendor (Coca-Cola) subject to suspension and debarment requirements during the audit period that was not procured through the School Corporation's affiliated Educational Services Center for cooperative purchasing. The School Corporation did not perform procedures to ensure the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in federal assistance programs or activities. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to one vendor (and related purchases) for both procurement and 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). . . ." 2 CFR 200.318(i) 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." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (b) A purchasing agent may purchase supplies under this section by inviting quotes from at least three (3) persons known to deal in the lines or classes of supplies to be purchased. (c) The purchasing agent shall mail an invitation to quote to the persons described in subsection (b) at least seven (7) days before the time fixed for receiving quotes. (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 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 intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Superintendent of Schools indicated that alternative vendor(s) had left the local geographical area and no longer attempted to submit quotes or bids for services as it had done in prior years. Additionally, School Corporation officials were unaware of the requirement to verify that all vendors over $25,000 were not suspended or debarred from receiving federal grant funds. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance with the Procurement and Suspension and Debarment compliance requirement could enable small purchases made by the School Corporation to be uncompetitive and could lead to contracting with vendors who are suspended or debarred from receiving federal grant funding. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management strengthen its system of internal controls over small purchase requirements to ensure that an adequate number price or rate quotes are obtained before purchase. Additionally, we recommended that vendors with a single or aggregate transaction amounts over $25,000 per fiscal year are verified for suspension and debarment prior to entering into the transaction and/or contract. 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: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23, FY 24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. The Indiana Department of Education defines "Direct Certification" (DC) as follows: "(DC) is a method to automatically qualify students for free or reduced meals using data from Family and Social Services Administration (SNAP, TANF, and Medicaid) and Department of Child Services (Foster) and matching that with the Local Educational Agency's reported enrollment. Direct Certified households do not need to complete a meal application and will not be included in the verification process because their eligibility has already been verified." Internal controls had not been properly designed and implemented over students receiving free/reduced price meal benefits via DC. The Assistant Food Service Director generated the DC reports on the School Nutrition Program Indiana web portal and entered resulting eligibility determinations into the point-of-sale system (Harmony) without a documented oversight, review or approval in process in place to ensure their accuracy. The lack of internal controls over the DCs 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 School Corporation officials were unaware they should document a review of the DC process by someone other than the Assistant Food Service Director. Effect The lack of an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Eligibility compliance requirement. Verifying the accuracy of students directly certified for benefits in the point-of-sale system will ensure that ineligible students do not receive free or reduced-price meals. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that directly certified students eligible for meal benefits are verified for accuracy in Harmony by someone other than the Assistant Food Service Director. 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: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23, FY 24 Pass-Through Entity: Indiana Department of Education 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 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $150,000 per Indiana Code. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases of $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases were followed. The School Corporation did not obtain price or rate quotes from multiple vendors for its audit period contract with Coca-Cola. Documentation detailing the history of procurement, including rationale to limit competition at the time of purchase was not provided for audit. Suspension and Debarment Nonfederal entities and contractors are subject to nonprocurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that entity, or adding a clause or condition to the covered transaction with that entity. The School Corporation had not designed or implemented adequate policies or procedures to ensure that applicable vendors who received federal funds over certain thresholds were not suspended or debarred from participating in federal awards programs. There was one vendor (Coca-Cola) subject to suspension and debarment requirements during the audit period that was not procured through the School Corporation's affiliated Educational Services Center for cooperative purchasing. The School Corporation did not perform procedures to ensure the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in federal assistance programs or activities. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to one vendor (and related purchases) for both procurement and 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). . . ." 2 CFR 200.318(i) 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." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (b) A purchasing agent may purchase supplies under this section by inviting quotes from at least three (3) persons known to deal in the lines or classes of supplies to be purchased. (c) The purchasing agent shall mail an invitation to quote to the persons described in subsection (b) at least seven (7) days before the time fixed for receiving quotes. (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 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 intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Superintendent of Schools indicated that alternative vendor(s) had left the local geographical area and no longer attempted to submit quotes or bids for services as it had done in prior years. Additionally, School Corporation officials were unaware of the requirement to verify that all vendors over $25,000 were not suspended or debarred from receiving federal grant funds. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance with the Procurement and Suspension and Debarment compliance requirement could enable small purchases made by the School Corporation to be uncompetitive and could lead to contracting with vendors who are suspended or debarred from receiving federal grant funding. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management strengthen its system of internal controls over small purchase requirements to ensure that an adequate number price or rate quotes are obtained before purchase. Additionally, we recommended that vendors with a single or aggregate transaction amounts over $25,000 per fiscal year are verified for suspension and debarment prior to entering into the transaction and/or contract. 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: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23, FY 24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Eligibility compliance requirement. The Indiana Department of Education defines "Direct Certification" (DC) as follows: "(DC) is a method to automatically qualify students for free or reduced meals using data from Family and Social Services Administration (SNAP, TANF, and Medicaid) and Department of Child Services (Foster) and matching that with the Local Educational Agency's reported enrollment. Direct Certified households do not need to complete a meal application and will not be included in the verification process because their eligibility has already been verified." Internal controls had not been properly designed and implemented over students receiving free/reduced price meal benefits via DC. The Assistant Food Service Director generated the DC reports on the School Nutrition Program Indiana web portal and entered resulting eligibility determinations into the point-of-sale system (Harmony) without a documented oversight, review or approval in process in place to ensure their accuracy. The lack of internal controls over the DCs 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 School Corporation officials were unaware they should document a review of the DC process by someone other than the Assistant Food Service Director. Effect The lack of an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the Eligibility compliance requirement. Verifying the accuracy of students directly certified for benefits in the point-of-sale system will ensure that ineligible students do not receive free or reduced-price meals. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that directly certified students eligible for meal benefits are verified for accuracy in Harmony by someone other than the Assistant Food Service Director. 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: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 23, FY 24 Pass-Through Entity: Indiana Department of Education 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 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is set at $150,000 per Indiana Code. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds: micro-purchases, typically for those purchases of $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. The School Corporation had not designed or implemented adequate policies or procedures to ensure that proper procurement procedures for small purchases were followed. The School Corporation did not obtain price or rate quotes from multiple vendors for its audit period contract with Coca-Cola. Documentation detailing the history of procurement, including rationale to limit competition at the time of purchase was not provided for audit. Suspension and Debarment Nonfederal entities and contractors are subject to nonprocurement debarment and suspension regulations. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or are ineligible for participation in federal assistance programs or activities. This is done by checking SAM Exclusions, collecting a certification from that entity, or adding a clause or condition to the covered transaction with that entity. The School Corporation had not designed or implemented adequate policies or procedures to ensure that applicable vendors who received federal funds over certain thresholds were not suspended or debarred from participating in federal awards programs. There was one vendor (Coca-Cola) subject to suspension and debarment requirements during the audit period that was not procured through the School Corporation's affiliated Educational Services Center for cooperative purchasing. The School Corporation did not perform procedures to ensure the vendor was not suspended, debarred, or otherwise excluded from or eligible for participation in federal assistance programs or activities. The lack of internal controls was a systemic issue throughout the audit period. Noncompliance was isolated to one vendor (and related purchases) for both procurement and 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). . . ." 2 CFR 200.318(i) 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." 2 CFR 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . ." Indiana Code 5-22-8-3 states in part: "(a) This section applies only if the purchasing agent expects the purchase to be: (1) at least fifty thousand dollars ($50,000); and (2) not more than one hundred fifty thousand dollars ($150,000). . . . (b) A purchasing agent may purchase supplies under this section by inviting quotes from at least three (3) persons known to deal in the lines or classes of supplies to be purchased. (c) The purchasing agent shall mail an invitation to quote to the persons described in subsection (b) at least seven (7) days before the time fixed for receiving quotes. (d) If the purchasing agent receives a satisfactory quote, the purchasing agent shall award a contract to the lowest responsible and responsive offeror for each line or class of supplies required." 2 CFR 180.300 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 intend to do business is not excluded or disqualified. You do this by: (a) Checking the SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Cause The Superintendent of Schools indicated that alternative vendor(s) had left the local geographical area and no longer attempted to submit quotes or bids for services as it had done in prior years. Additionally, School Corporation officials were unaware of the requirement to verify that all vendors over $25,000 were not suspended or debarred from receiving federal grant funds. Effect The lack of an effective internal control system enabled material noncompliance to occur and remain undetected. Noncompliance with the Procurement and Suspension and Debarment compliance requirement could enable small purchases made by the School Corporation to be uncompetitive and could lead to contracting with vendors who are suspended or debarred from receiving federal grant funding. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended the School Corporation's management strengthen its system of internal controls over small purchase requirements to ensure that an adequate number price or rate quotes are obtained before purchase. Additionally, we recommended that vendors with a single or aggregate transaction amounts over $25,000 per fiscal year are verified for suspension and debarment prior to entering into the transaction and/or contract. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.218, U.S. Department of Housing and Urban Development Community Development Block Grant Entitlement Grant Federal Award Identification Number and Year - B23MC260015 Pass through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303 (a), the recipient and subrecipient must 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. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The community development manager’s payroll expenses charged to the grant were supported by time records, but these records were not reviewed or approved by another individual. Questioned Costs - Unknown Identification of How Questioned Costs Were Computed - Not applicable Context - Recipients of federal awards must have internal control procedures in place to ensure payroll expenses allocated to the grant are accurate. During our audit testing, we confirmed that the community development manager reviews all payroll expenses charged to the grant, but nobody reviews or approves the managers allocated payroll expenses. Cause and Effect - The City did not have a procedure in place to review the community development manager's allocated payroll expenses, which could cause improperly reported or ineligible grant expenses. Recommendation - We recommend that the City implement internal controls to ensure the community development manager's payroll allocation is reviewed and approved before they are charged to the grant. Views of Responsible Officials and Corrective Action Plan - The City agrees with the finding. The City will implement a secondary review and approval of time sheets submitted by the community development manager. The approval will be completed by the third party consultant or chief of staff.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.218, U.S. Department of Housing and Urban Development Community Development Block Grant Entitlement Grant Federal Award Identification Number and Year - B23MC260015 Pass through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303 (a), the recipient and subrecipient must 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. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The community development manager’s payroll expenses charged to the grant were supported by time records, but these records were not reviewed or approved by another individual. Questioned Costs - Unknown Identification of How Questioned Costs Were Computed - Not applicable Context - Recipients of federal awards must have internal control procedures in place to ensure payroll expenses allocated to the grant are accurate. During our audit testing, we confirmed that the community development manager reviews all payroll expenses charged to the grant, but nobody reviews or approves the managers allocated payroll expenses. Cause and Effect - The City did not have a procedure in place to review the community development manager's allocated payroll expenses, which could cause improperly reported or ineligible grant expenses. Recommendation - We recommend that the City implement internal controls to ensure the community development manager's payroll allocation is reviewed and approved before they are charged to the grant. Views of Responsible Officials and Corrective Action Plan - The City agrees with the finding. The City will implement a secondary review and approval of time sheets submitted by the community development manager. The approval will be completed by the third party consultant or chief of staff.
Assistance Listing Number, Federal Agency, and Program Name - ALN 14.218, U.S. Department of Housing and Urban Development Community Development Block Grant Entitlement Grant Federal Award Identification Number and Year - B23MC260015 Pass through Entity - Not applicable Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303 (a), the recipient and subrecipient must 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. These internal controls should align with the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition - The community development manager’s payroll expenses charged to the grant were supported by time records, but these records were not reviewed or approved by another individual. Questioned Costs - Unknown Identification of How Questioned Costs Were Computed - Not applicable Context - Recipients of federal awards must have internal control procedures in place to ensure payroll expenses allocated to the grant are accurate. During our audit testing, we confirmed that the community development manager reviews all payroll expenses charged to the grant, but nobody reviews or approves the managers allocated payroll expenses. Cause and Effect - The City did not have a procedure in place to review the community development manager's allocated payroll expenses, which could cause improperly reported or ineligible grant expenses. Recommendation - We recommend that the City implement internal controls to ensure the community development manager's payroll allocation is reviewed and approved before they are charged to the grant. Views of Responsible Officials and Corrective Action Plan - The City agrees with the finding. The City will implement a secondary review and approval of time sheets submitted by the community development manager. The approval will be completed by the third party consultant or chief of staff.
Program/Cluster: CDBG – Entitlement/Special Purpose Grants Cluster Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award Year: 2023-24 Grant Award Number: B-23-MC-06-0533 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Instance of Non-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. Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: As a result of our audit procedures, we noted that one (1) out of one (1) first tier sub-awards tested were not reported timely in the FFATA Subaward Reporting System (FSRS), totaling $40,000. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 1 - 1 - - Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $40,000 - $40,000 - - Cause: The City did not have proper internal controls in place to ensure sub-award information was submitted in accordance with FFATA. Effect: The lack of adequate policies governing report preparation and submission resulted in FFATA special reports not being filed as required by the program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: We tested one (1) out of one (1) first tier subawards greater than $30,000 awarded during the fiscal year. Repeat Finding from Prior Year(s): No. Recommendation: We recommend the City implement policies and procedures to ensure the requirement FFATA reports are prepared and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Views of Responsible Officials: Management agrees. See separately issued corrective action plan.
Program/Cluster: CDBG – Entitlement/Special Purpose Grants Cluster Federal Financial Assistance Listing Number: 14.218 Federal Grantor: U.S. Department of Housing and Urban Development Award Year: 2023-24 Grant Award Number: B-23-MC-06-0533 Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Instance of Non-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. Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Condition: As a result of our audit procedures, we noted that one (1) out of one (1) first tier sub-awards tested were not reported timely in the FFATA Subaward Reporting System (FSRS), totaling $40,000. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 1 - 1 - - Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $40,000 - $40,000 - - Cause: The City did not have proper internal controls in place to ensure sub-award information was submitted in accordance with FFATA. Effect: The lack of adequate policies governing report preparation and submission resulted in FFATA special reports not being filed as required by the program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: We tested one (1) out of one (1) first tier subawards greater than $30,000 awarded during the fiscal year. Repeat Finding from Prior Year(s): No. Recommendation: We recommend the City implement policies and procedures to ensure the requirement FFATA reports are prepared and submitted to the Federal Funding Accountability and Transparency Act Subaward Reporting System in a timely manner. Views of Responsible Officials: Management agrees. See separately issued corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($86,004) did not agree to the underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755, respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively), for the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($86,004) did not agree to the underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755, respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively), for the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($86,004) did not agree to the underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755, respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively), for the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management implemented a review control over the annual data reports, however, it was not sufficient enough to detect and prevent errors in annual data reports submitted to the Indiana Department of Education. Effect: Annual data reports submitted during the audit period to the Indiana Department of Education contained material errors compared to underlying transaction detail for the period reported. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER I amount reported on the Year 3 report ($86,004) did not agree to the underlying expenditure records ($196,436) for the period of July 1, 2021 through June 30, 2022. We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($0 and $1,684,755, respectively) did not agree to the underlying expenditure records ($1,391,963 and $4,330,649, respectively), for the period of July 1, 2022 through June 30, 2023. Identification as a repeat finding: Yes. See Finding 2022-003 in the prior audit report. Recommendation: We recommend management review internal controls over the review of annual data reports to ensure the data to be submitted agrees to underlying transaction detail or other supporting documentation prior to the submission of the annual data report. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay w ages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III (84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis- Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements during the audit period. The total project costs disbursed during the audit period in our sample was $3,681,455 which includes material and labor costs. Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report. Recommendation: We recommend the School Corporation include a wage rate requirement clause in all contracts requiring labor installation which are funded with federal grants. We also recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis- Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay w ages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III (84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis- Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements during the audit period. The total project costs disbursed during the audit period in our sample was $3,681,455 which includes material and labor costs. Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report. Recommendation: We recommend the School Corporation include a wage rate requirement clause in all contracts requiring labor installation which are funded with federal grants. We also recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis- Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay w ages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had projects for construction of new facilities including an early learning center and improvements to sports facilities which was funded with ESSER II (84.425D) and ESSER III (84.425U) grant awards. In our sample of three vendors, the School Corporation did not include Davis- Bacon wage rate requirements in the vendor contract, and therefore the vendor did not include the verbiage within their subcontractor agreements. Also, the School Corporation did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements during the audit period. The total project costs disbursed during the audit period in our sample was $3,681,455 which includes material and labor costs. Identification as a repeat finding: Yes. See Finding 2022-002 in the prior audit report. Recommendation: We recommend the School Corporation include a wage rate requirement clause in all contracts requiring labor installation which are funded with federal grants. We also recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis- Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria and Condition: According to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), section 200.403, establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with State and local governments. To be allowable, under federal awards, costs must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. For five of the forty disbursement samples selected, PEBC was unable to provide adequate documentation for the selected items. Two of the samples were noted by management to have been improperly coded to the federal grant. As a result, the auditor was unable to determine the allowability of these sample selections under the Coronavirus State and Local Fiscal Recovery Funds grant related to the student educator test stipend program. Further, the auditor was unable to determine whether costs were incurred during the approved budget period. Cause: The condition was caused by a lack of internal controls over Coronavirus State and Local Fiscal Recovery Funds claims for student educator test stipend expenditures. Effect: When adequate support is not obtained and used to support the amount charged to the federal program or supported by an after-the-fact review, there is a risk that unsupported or inaccurate costs are being charged to the federal program. Context: During testing procedures over Coronavirus State and Local Fiscal Recovery Funds disbursements for the activities allowed or unallowed compliance requirement, the auditor was unable to obtain source documents from management for five of the forty samples. Identification of Repeat Findings: This is not a repeat finding. Recommendation: Proper control activities should be implemented to allow for a consistent, accurate, and allowable method to support distribution of expenditures to federal programs, which could include a consistent multi-stage review process for expenditures that are to be allocated to the Coronavirus State and Local Fiscal Recovery Funds grant. Further, management should clearly organize and retain records to support approved amounts being listed as expenditures on their SEFA.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-123-PN01, 23611-0123-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness 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 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 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 intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $114,123 in FY23 and $13,404 in FY24 for contracted rehabilitation therapy and speech pathology services. The School Corporation did properly perform a suspension and debarment checks on the sample vendors. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-123-PN01, 23611-0123-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement Audit Finding: Material Weakness 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 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 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 intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $114,123 in FY23 and $13,404 in FY24 for contracted rehabilitation therapy and speech pathology services. The School Corporation did properly perform a suspension and debarment checks on the sample vendors. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: For the three projects sampled for Davis-Bacon requirements, the School Corporation did not obtain the weekly payroll reports certifications from the companies that performed renovations on the School Corporation. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have contracts with the companies that included the clause for the federal wage rate requirements. The total amount disbursed and reported on the SEFA during the audit period is $648,235 and the labor portion was not determinable by the School Corporation. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-002. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Additionally, We recommend the School Corporation implement a formal process to ensure the contracts including labor costs over $2,000 funded by federal awards have Davis Bacon wage rate requirement clause in written contract. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agency: US Department of Education (ED) Program Name: Student Financial Assistance Cluster: Federal Direct Student Loans ALN #: 84.268 Award Numbers: N/A; Federal Award Year 2023 - 2024 Questioned Costs: None 2024-003. Finding: Errors in Reporting for NSLDS The University of Illinois Chicago did not properly report an enrollment change for a student who received federal student aid to the National Student Loan Data System (NSLDS) and the internal controls in place did not identify the error. Condition: Out of the twenty-five students tested at the University of Illinois Chicago, we noted one (4%) student in which the University did not report the correct enrollment effective date to the NSLDS at the Program-Level. The sample was not intended to be, and was not, a statistically valid sample. Criteria: The Code of Federal Regulations (34 CFR 685.309) requires enrollment status changes for students be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Regulations require the status include an accurate effective date. According to the NSLDS Enrollment Reporting Guide, a student’s Program-Level enrollment status should be reported with the same enrollment status as student’s Campus-Level enrollment status for all programs the student is enrolled in at a location, even if the student is not currently taking coursework which applies to a particular program. If the student has withdrawn or graduated from an academic program, a “terminal enrollment status” of ‘W’ or ‘G,’ as appropriate, should be reported for the program, even if the student is still taking coursework applicable to other programs in which the student is enrolled. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure enrollment reporting is completed properly. Cause: University officials stated despite a defect resolution implemented in June 2023, an issue remains unresolved with the NSLDS reporting process. Further targeted investigation into the NSLDS reporting process is ongoing. 2024-003. Finding: Errors in Reporting for NSLDS (Continued) Effect: If the NSLDS system is not updated with the student information, overawards could occur should the student transfer to another institution and the student may not properly enter the repayment period. (Finding Code No. 2024-003; 2023-007; 2022-006; 2021-010; 2020-006) Recommendation: We recommend the University of Illinois Chicago review current processes for reporting to NSLDS and implement procedures to ensure submissions are reported timely and accurately. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Agriculture (USDA), US Department of Energy (DOE), US Health & Human Services (HHS) Program Names: Research & Development Cluster: Agriculture and Food Research Initiative (AFRI); Office of Science Financial Assistance Program; Fossil Energy Research and Development; Alcohol Research Programs; Cardiovascular Diseases Research; Arthritis, Musculoskeletal and Skin Diseases Research; Vision Research ALN #s: 10.310; 81.049; 81.089; 93.273; 93.837; 93.846; and 93.867 Award Numbers: AG NIFA 2021-68012-35898; DOE DE-SC0018420; DOE DE-FE0032049; SNAP 5P50AA022538 10; SNAP 5R01HL152692-04; Snp 5R01AR081448-02; and NEI 5 P30 EY001792-45 Questioned Costs: None 2024-004. Finding: Internal Controls over Procurement The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not have sufficient rationale documented for the noncompetitive procurement method selected within their iBuy system at the time of approval of the purchase to allow a reviewer to determine the appropriateness of the procurement method in the Research and Development Cluster. Condition: The University of Illinois Urbana-Champaign and the University of Illinois Chicago’s internal controls over small purchases include review and approval of a purchase requisition form that documents the procurement method selected. Within the iBuy system, when a noncompetitive procurement method is selected, a radio button allows for selection of one of several circumstances where noncompetitive procurement is permitted by 2 CFR 200.320, including that the procurement can only be fulfilled by a single source. When this selection is made, additional information supporting this rationale should be available to the reviewer to determine that this noncompetitive procurement method is appropriate. We noted instances where there was not evidence that this information was available to the reviewer at the time of the approval. Out of twenty-nine small purchase procurement transactions tested at the University of Illinois Urbana-Champaign, for five transactions (17%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Out of eleven small purchase procurement transactions tested at the University of Illinois Chicago, for six transactions (55%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Based on additional information provided to us during our testing, there were no indications that the noncompetitive procurement methods selected were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. 2024-004. Finding: Internal Controls over Procurement (Continued) Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated a single e-procurement system is used to collect and capture procurement-related information. The electronic system required selection of the relevant procurement method in the form of a radio button, but did not require additional information in the central procurement file. Rather, this information was maintained by the requesting unit. Effect: If the procurement purchase requisition forms do not include sufficient supporting documentation of the rationale for the noncompetitive method of procurement selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code 2024-004) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes within the iBuy system for noncompetitive procurement transactions to ensure sufficient documentation is included to support the rationale for the noncompetitive method of procurement selected. University Response: Accepted. While the University agrees that the supporting documentation was not captured in the electronic payment system, the rationale was available in other University records. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Agriculture (USDA), US Department of Energy (DOE), US Health & Human Services (HHS) Program Names: Research & Development Cluster: Agriculture and Food Research Initiative (AFRI); Office of Science Financial Assistance Program; Fossil Energy Research and Development; Alcohol Research Programs; Cardiovascular Diseases Research; Arthritis, Musculoskeletal and Skin Diseases Research; Vision Research ALN #s: 10.310; 81.049; 81.089; 93.273; 93.837; 93.846; and 93.867 Award Numbers: AG NIFA 2021-68012-35898; DOE DE-SC0018420; DOE DE-FE0032049; SNAP 5P50AA022538 10; SNAP 5R01HL152692-04; Snp 5R01AR081448-02; and NEI 5 P30 EY001792-45 Questioned Costs: None 2024-004. Finding: Internal Controls over Procurement The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not have sufficient rationale documented for the noncompetitive procurement method selected within their iBuy system at the time of approval of the purchase to allow a reviewer to determine the appropriateness of the procurement method in the Research and Development Cluster. Condition: The University of Illinois Urbana-Champaign and the University of Illinois Chicago’s internal controls over small purchases include review and approval of a purchase requisition form that documents the procurement method selected. Within the iBuy system, when a noncompetitive procurement method is selected, a radio button allows for selection of one of several circumstances where noncompetitive procurement is permitted by 2 CFR 200.320, including that the procurement can only be fulfilled by a single source. When this selection is made, additional information supporting this rationale should be available to the reviewer to determine that this noncompetitive procurement method is appropriate. We noted instances where there was not evidence that this information was available to the reviewer at the time of the approval. Out of twenty-nine small purchase procurement transactions tested at the University of Illinois Urbana-Champaign, for five transactions (17%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Out of eleven small purchase procurement transactions tested at the University of Illinois Chicago, for six transactions (55%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Based on additional information provided to us during our testing, there were no indications that the noncompetitive procurement methods selected were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. 2024-004. Finding: Internal Controls over Procurement (Continued) Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated a single e-procurement system is used to collect and capture procurement-related information. The electronic system required selection of the relevant procurement method in the form of a radio button, but did not require additional information in the central procurement file. Rather, this information was maintained by the requesting unit. Effect: If the procurement purchase requisition forms do not include sufficient supporting documentation of the rationale for the noncompetitive method of procurement selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code 2024-004) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes within the iBuy system for noncompetitive procurement transactions to ensure sufficient documentation is included to support the rationale for the noncompetitive method of procurement selected. University Response: Accepted. While the University agrees that the supporting documentation was not captured in the electronic payment system, the rationale was available in other University records. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Agriculture (USDA), US Department of Energy (DOE), US Health & Human Services (HHS) Program Names: Research & Development Cluster: Agriculture and Food Research Initiative (AFRI); Office of Science Financial Assistance Program; Fossil Energy Research and Development; Alcohol Research Programs; Cardiovascular Diseases Research; Arthritis, Musculoskeletal and Skin Diseases Research; Vision Research ALN #s: 10.310; 81.049; 81.089; 93.273; 93.837; 93.846; and 93.867 Award Numbers: AG NIFA 2021-68012-35898; DOE DE-SC0018420; DOE DE-FE0032049; SNAP 5P50AA022538 10; SNAP 5R01HL152692-04; Snp 5R01AR081448-02; and NEI 5 P30 EY001792-45 Questioned Costs: None 2024-004. Finding: Internal Controls over Procurement The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not have sufficient rationale documented for the noncompetitive procurement method selected within their iBuy system at the time of approval of the purchase to allow a reviewer to determine the appropriateness of the procurement method in the Research and Development Cluster. Condition: The University of Illinois Urbana-Champaign and the University of Illinois Chicago’s internal controls over small purchases include review and approval of a purchase requisition form that documents the procurement method selected. Within the iBuy system, when a noncompetitive procurement method is selected, a radio button allows for selection of one of several circumstances where noncompetitive procurement is permitted by 2 CFR 200.320, including that the procurement can only be fulfilled by a single source. When this selection is made, additional information supporting this rationale should be available to the reviewer to determine that this noncompetitive procurement method is appropriate. We noted instances where there was not evidence that this information was available to the reviewer at the time of the approval. Out of twenty-nine small purchase procurement transactions tested at the University of Illinois Urbana-Champaign, for five transactions (17%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Out of eleven small purchase procurement transactions tested at the University of Illinois Chicago, for six transactions (55%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Based on additional information provided to us during our testing, there were no indications that the noncompetitive procurement methods selected were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. 2024-004. Finding: Internal Controls over Procurement (Continued) Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated a single e-procurement system is used to collect and capture procurement-related information. The electronic system required selection of the relevant procurement method in the form of a radio button, but did not require additional information in the central procurement file. Rather, this information was maintained by the requesting unit. Effect: If the procurement purchase requisition forms do not include sufficient supporting documentation of the rationale for the noncompetitive method of procurement selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code 2024-004) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes within the iBuy system for noncompetitive procurement transactions to ensure sufficient documentation is included to support the rationale for the noncompetitive method of procurement selected. University Response: Accepted. While the University agrees that the supporting documentation was not captured in the electronic payment system, the rationale was available in other University records. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Agriculture (USDA), US Department of Energy (DOE), US Health & Human Services (HHS) Program Names: Research & Development Cluster: Agriculture and Food Research Initiative (AFRI); Office of Science Financial Assistance Program; Fossil Energy Research and Development; Alcohol Research Programs; Cardiovascular Diseases Research; Arthritis, Musculoskeletal and Skin Diseases Research; Vision Research ALN #s: 10.310; 81.049; 81.089; 93.273; 93.837; 93.846; and 93.867 Award Numbers: AG NIFA 2021-68012-35898; DOE DE-SC0018420; DOE DE-FE0032049; SNAP 5P50AA022538 10; SNAP 5R01HL152692-04; Snp 5R01AR081448-02; and NEI 5 P30 EY001792-45 Questioned Costs: None 2024-004. Finding: Internal Controls over Procurement The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not have sufficient rationale documented for the noncompetitive procurement method selected within their iBuy system at the time of approval of the purchase to allow a reviewer to determine the appropriateness of the procurement method in the Research and Development Cluster. Condition: The University of Illinois Urbana-Champaign and the University of Illinois Chicago’s internal controls over small purchases include review and approval of a purchase requisition form that documents the procurement method selected. Within the iBuy system, when a noncompetitive procurement method is selected, a radio button allows for selection of one of several circumstances where noncompetitive procurement is permitted by 2 CFR 200.320, including that the procurement can only be fulfilled by a single source. When this selection is made, additional information supporting this rationale should be available to the reviewer to determine that this noncompetitive procurement method is appropriate. We noted instances where there was not evidence that this information was available to the reviewer at the time of the approval. Out of twenty-nine small purchase procurement transactions tested at the University of Illinois Urbana-Champaign, for five transactions (17%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Out of eleven small purchase procurement transactions tested at the University of Illinois Chicago, for six transactions (55%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Based on additional information provided to us during our testing, there were no indications that the noncompetitive procurement methods selected were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. 2024-004. Finding: Internal Controls over Procurement (Continued) Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated a single e-procurement system is used to collect and capture procurement-related information. The electronic system required selection of the relevant procurement method in the form of a radio button, but did not require additional information in the central procurement file. Rather, this information was maintained by the requesting unit. Effect: If the procurement purchase requisition forms do not include sufficient supporting documentation of the rationale for the noncompetitive method of procurement selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code 2024-004) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes within the iBuy system for noncompetitive procurement transactions to ensure sufficient documentation is included to support the rationale for the noncompetitive method of procurement selected. University Response: Accepted. While the University agrees that the supporting documentation was not captured in the electronic payment system, the rationale was available in other University records. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Agriculture (USDA), US Department of Energy (DOE), US Health & Human Services (HHS) Program Names: Research & Development Cluster: Agriculture and Food Research Initiative (AFRI); Office of Science Financial Assistance Program; Fossil Energy Research and Development; Alcohol Research Programs; Cardiovascular Diseases Research; Arthritis, Musculoskeletal and Skin Diseases Research; Vision Research ALN #s: 10.310; 81.049; 81.089; 93.273; 93.837; 93.846; and 93.867 Award Numbers: AG NIFA 2021-68012-35898; DOE DE-SC0018420; DOE DE-FE0032049; SNAP 5P50AA022538 10; SNAP 5R01HL152692-04; Snp 5R01AR081448-02; and NEI 5 P30 EY001792-45 Questioned Costs: None 2024-004. Finding: Internal Controls over Procurement The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not have sufficient rationale documented for the noncompetitive procurement method selected within their iBuy system at the time of approval of the purchase to allow a reviewer to determine the appropriateness of the procurement method in the Research and Development Cluster. Condition: The University of Illinois Urbana-Champaign and the University of Illinois Chicago’s internal controls over small purchases include review and approval of a purchase requisition form that documents the procurement method selected. Within the iBuy system, when a noncompetitive procurement method is selected, a radio button allows for selection of one of several circumstances where noncompetitive procurement is permitted by 2 CFR 200.320, including that the procurement can only be fulfilled by a single source. When this selection is made, additional information supporting this rationale should be available to the reviewer to determine that this noncompetitive procurement method is appropriate. We noted instances where there was not evidence that this information was available to the reviewer at the time of the approval. Out of twenty-nine small purchase procurement transactions tested at the University of Illinois Urbana-Champaign, for five transactions (17%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Out of eleven small purchase procurement transactions tested at the University of Illinois Chicago, for six transactions (55%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Based on additional information provided to us during our testing, there were no indications that the noncompetitive procurement methods selected were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. 2024-004. Finding: Internal Controls over Procurement (Continued) Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated a single e-procurement system is used to collect and capture procurement-related information. The electronic system required selection of the relevant procurement method in the form of a radio button, but did not require additional information in the central procurement file. Rather, this information was maintained by the requesting unit. Effect: If the procurement purchase requisition forms do not include sufficient supporting documentation of the rationale for the noncompetitive method of procurement selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code 2024-004) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes within the iBuy system for noncompetitive procurement transactions to ensure sufficient documentation is included to support the rationale for the noncompetitive method of procurement selected. University Response: Accepted. While the University agrees that the supporting documentation was not captured in the electronic payment system, the rationale was available in other University records. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Agriculture (USDA), US Department of Energy (DOE), US Health & Human Services (HHS) Program Names: Research & Development Cluster: Agriculture and Food Research Initiative (AFRI); Office of Science Financial Assistance Program; Fossil Energy Research and Development; Alcohol Research Programs; Cardiovascular Diseases Research; Arthritis, Musculoskeletal and Skin Diseases Research; Vision Research ALN #s: 10.310; 81.049; 81.089; 93.273; 93.837; 93.846; and 93.867 Award Numbers: AG NIFA 2021-68012-35898; DOE DE-SC0018420; DOE DE-FE0032049; SNAP 5P50AA022538 10; SNAP 5R01HL152692-04; Snp 5R01AR081448-02; and NEI 5 P30 EY001792-45 Questioned Costs: None 2024-004. Finding: Internal Controls over Procurement The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not have sufficient rationale documented for the noncompetitive procurement method selected within their iBuy system at the time of approval of the purchase to allow a reviewer to determine the appropriateness of the procurement method in the Research and Development Cluster. Condition: The University of Illinois Urbana-Champaign and the University of Illinois Chicago’s internal controls over small purchases include review and approval of a purchase requisition form that documents the procurement method selected. Within the iBuy system, when a noncompetitive procurement method is selected, a radio button allows for selection of one of several circumstances where noncompetitive procurement is permitted by 2 CFR 200.320, including that the procurement can only be fulfilled by a single source. When this selection is made, additional information supporting this rationale should be available to the reviewer to determine that this noncompetitive procurement method is appropriate. We noted instances where there was not evidence that this information was available to the reviewer at the time of the approval. Out of twenty-nine small purchase procurement transactions tested at the University of Illinois Urbana-Champaign, for five transactions (17%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Out of eleven small purchase procurement transactions tested at the University of Illinois Chicago, for six transactions (55%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Based on additional information provided to us during our testing, there were no indications that the noncompetitive procurement methods selected were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. 2024-004. Finding: Internal Controls over Procurement (Continued) Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated a single e-procurement system is used to collect and capture procurement-related information. The electronic system required selection of the relevant procurement method in the form of a radio button, but did not require additional information in the central procurement file. Rather, this information was maintained by the requesting unit. Effect: If the procurement purchase requisition forms do not include sufficient supporting documentation of the rationale for the noncompetitive method of procurement selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code 2024-004) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes within the iBuy system for noncompetitive procurement transactions to ensure sufficient documentation is included to support the rationale for the noncompetitive method of procurement selected. University Response: Accepted. While the University agrees that the supporting documentation was not captured in the electronic payment system, the rationale was available in other University records. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Agriculture (USDA), US Department of Energy (DOE), US Health & Human Services (HHS) Program Names: Research & Development Cluster: Agriculture and Food Research Initiative (AFRI); Office of Science Financial Assistance Program; Fossil Energy Research and Development; Alcohol Research Programs; Cardiovascular Diseases Research; Arthritis, Musculoskeletal and Skin Diseases Research; Vision Research ALN #s: 10.310; 81.049; 81.089; 93.273; 93.837; 93.846; and 93.867 Award Numbers: AG NIFA 2021-68012-35898; DOE DE-SC0018420; DOE DE-FE0032049; SNAP 5P50AA022538 10; SNAP 5R01HL152692-04; Snp 5R01AR081448-02; and NEI 5 P30 EY001792-45 Questioned Costs: None 2024-004. Finding: Internal Controls over Procurement The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not have sufficient rationale documented for the noncompetitive procurement method selected within their iBuy system at the time of approval of the purchase to allow a reviewer to determine the appropriateness of the procurement method in the Research and Development Cluster. Condition: The University of Illinois Urbana-Champaign and the University of Illinois Chicago’s internal controls over small purchases include review and approval of a purchase requisition form that documents the procurement method selected. Within the iBuy system, when a noncompetitive procurement method is selected, a radio button allows for selection of one of several circumstances where noncompetitive procurement is permitted by 2 CFR 200.320, including that the procurement can only be fulfilled by a single source. When this selection is made, additional information supporting this rationale should be available to the reviewer to determine that this noncompetitive procurement method is appropriate. We noted instances where there was not evidence that this information was available to the reviewer at the time of the approval. Out of twenty-nine small purchase procurement transactions tested at the University of Illinois Urbana-Champaign, for five transactions (17%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Out of eleven small purchase procurement transactions tested at the University of Illinois Chicago, for six transactions (55%), there was not sufficient evidence to support that documentation of the noncompetitive procurement method selected was provided at the time of review and approval. Based on additional information provided to us during our testing, there were no indications that the noncompetitive procurement methods selected were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. 2024-004. Finding: Internal Controls over Procurement (Continued) Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated a single e-procurement system is used to collect and capture procurement-related information. The electronic system required selection of the relevant procurement method in the form of a radio button, but did not require additional information in the central procurement file. Rather, this information was maintained by the requesting unit. Effect: If the procurement purchase requisition forms do not include sufficient supporting documentation of the rationale for the noncompetitive method of procurement selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code 2024-004) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes within the iBuy system for noncompetitive procurement transactions to ensure sufficient documentation is included to support the rationale for the noncompetitive method of procurement selected. University Response: Accepted. While the University agrees that the supporting documentation was not captured in the electronic payment system, the rationale was available in other University records. The University will take steps to address the recommendation in this finding.
Department of Homeland Security Federal Financial Assistance Listing #97.036 COVID‐19 Disaster Grants – Public Assistance Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal 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: Our testing identified eleven instances where contract labor costs were over claimed under the program due to a calculation error. Monument Health’s methodology for identifying contract labor attributable to COVID to be based upon identifying total contact labor and multiplying by the percentage of COVID patient days as a percentage of total patient days. The methodology also identified certain cost centers were to be excluded from the calculation, including behavioral health and med/surg nursing. Based upon review of management’s allocation percentage, it was noted the behavioral health and med/surg nursing COVID patient days were included within the total COVID patient days; therefore, a higher percentage of COVID patient days to total patient days was calculated. The calculation percentage was then utilized to calculate contract labor attributable to COVID for contract labor costs identified from July 2, 2022 through May 11, 2023. Cause: The review process did not identify the behavioral health and med/surg nursing COVID patient days being improperly included within the calculation of contract labor attributable to COVID. Effect: Monument Health’s control did not detect or correct the calculation error identified, which resulted in expenditures being claimed under the federal program that may be unallowable and a reasonable possibility that Monument Health would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: There are questioned costs in the amount of $58,985. Context: A non‐statistical sample of 60 out of 2,565 total transactions were selected for testing, which accounted for $178,483 of $10,295,993 of federal program expenditures. In addition, five individually significant items were selected for testing which accounted for $1,066,229 of federal program expenditures. Testing was also performed over the calculation of contract labor attributable to COVID patient days as a percentage of total patient days for the period from July 1, 2021 to July 1, 2022 and from July 2, 2022 to May 11, 2023. Repeat Finding from Prior Year: No Recommendation: We recommend Monument Health review and strengthen the controls surrounding the calculations of expenditures being claimed under the grant. Views of Responsible Officials: Management agrees with the finding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Material Weakness Material Noncompliance Program: Assistance Listing 84.010A - Title I Grants To Local Educational Agencies Assistance Listing: 84.027/84.027X/84.173/84.173X – Special Education Cluster (IDEA) Assistance Listing: 84.425D– Elementary and Secondary School Emergency Relief Fund (ESSER II) Assistance Listing: 84.425U– Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Repeat Finding: Yes Criteria: 2 CFR 200.302 and 2 CFR 200.303 outline key requirements for non-federal entities managing federal awards. Section 200.302 mandates that a financial management system be in place to prepare reports as required by both general and program-specific terms and conditions. It also requires tracing funds to a level of expenditure that demonstrates compliance with federal statutes, regulations, and the terms of the federal award, including comparing expenditures with the budget for each federal award. Section 200.303 requires non-federal entities to establish and maintain effective internal controls over federal awards, ensuring reasonable assurance that the entity is managing the award in compliance with federal laws, regulations, and the award's terms and conditions. Condition: The District’s internal controls over budgeting for federal grants are insufficient to ensure compliance with federal regulations and to stay within the budgetary limits established by the federal awards, as specified in the Mississippi Comprehensive Automated Performance-based System (MCAPS), administered through the Mississippi Department of Education. Specifically, the District has not adequately adhered to budgeting restraints outlined for its federal grants. Our audit procedures identified the following instances where actual expenditures appear to exceed the budgeted amounts: Six-line items in the ARP ESSER grant, totaling $115,645.51. Five-line items in the ESSER II grant, totaling $31,135.42 Three-line items in the Special Education IDEA Part B grant, totaling $9,474.44. One-line item in the Title I, Part A grant, totaling $8,640.88. Context/ Perspective: This finding is a result of our budget to actual comparisons for federal grant purposes of major programs and the conditions cited appear to be a systematic issue. Cause: The District did not properly monitor budget limits established in MCAPS to ensure that budgeting requirements were fulfilled. Effect: Failure to remain within established budget limits in MCAPS could affect future eligibility for federal award programs or result in a loss or misappropriation of public assets. Questioned Costs: $146,780.93 (ESSER II and ARP ESSER) Recommendation: The District should establish additional internal controls to ensure that it remains within budget limits for each grant maintained in MCAPS. Views of Responsible Officials: The Auditee’s Corrective Action Plan lists the District’s response to the findings.
Material Weakness Material Noncompliance Program: Assistance Listing 84.010A - Title I Grants To Local Educational Agencies Assistance Listing: 84.027/84.027X/84.173/84.173X – Special Education Cluster (IDEA) Assistance Listing: 84.425D– Elementary and Secondary School Emergency Relief Fund (ESSER II) Assistance Listing: 84.425U– Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Repeat Finding: Yes Criteria: 2 CFR 200.302 and 2 CFR 200.303 outline key requirements for non-federal entities managing federal awards. Section 200.302 mandates that a financial management system be in place to prepare reports as required by both general and program-specific terms and conditions. It also requires tracing funds to a level of expenditure that demonstrates compliance with federal statutes, regulations, and the terms of the federal award, including comparing expenditures with the budget for each federal award. Section 200.303 requires non-federal entities to establish and maintain effective internal controls over federal awards, ensuring reasonable assurance that the entity is managing the award in compliance with federal laws, regulations, and the award's terms and conditions. Condition: The District’s internal controls over budgeting for federal grants are insufficient to ensure compliance with federal regulations and to stay within the budgetary limits established by the federal awards, as specified in the Mississippi Comprehensive Automated Performance-based System (MCAPS), administered through the Mississippi Department of Education. Specifically, the District has not adequately adhered to budgeting restraints outlined for its federal grants. Our audit procedures identified the following instances where actual expenditures appear to exceed the budgeted amounts: Six-line items in the ARP ESSER grant, totaling $115,645.51. Five-line items in the ESSER II grant, totaling $31,135.42 Three-line items in the Special Education IDEA Part B grant, totaling $9,474.44. One-line item in the Title I, Part A grant, totaling $8,640.88. Context/ Perspective: This finding is a result of our budget to actual comparisons for federal grant purposes of major programs and the conditions cited appear to be a systematic issue. Cause: The District did not properly monitor budget limits established in MCAPS to ensure that budgeting requirements were fulfilled. Effect: Failure to remain within established budget limits in MCAPS could affect future eligibility for federal award programs or result in a loss or misappropriation of public assets. Questioned Costs: $146,780.93 (ESSER II and ARP ESSER) Recommendation: The District should establish additional internal controls to ensure that it remains within budget limits for each grant maintained in MCAPS. Views of Responsible Officials: The Auditee’s Corrective Action Plan lists the District’s response to the findings.
Material Weakness Material Noncompliance Program: Assistance Listing 84.010A - Title I Grants To Local Educational Agencies Assistance Listing: 84.027/84.027X/84.173/84.173X – Special Education Cluster (IDEA) Assistance Listing: 84.425D– Elementary and Secondary School Emergency Relief Fund (ESSER II) Assistance Listing: 84.425U– Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Repeat Finding: Yes Criteria: 2 CFR 200.302 and 2 CFR 200.303 outline key requirements for non-federal entities managing federal awards. Section 200.302 mandates that a financial management system be in place to prepare reports as required by both general and program-specific terms and conditions. It also requires tracing funds to a level of expenditure that demonstrates compliance with federal statutes, regulations, and the terms of the federal award, including comparing expenditures with the budget for each federal award. Section 200.303 requires non-federal entities to establish and maintain effective internal controls over federal awards, ensuring reasonable assurance that the entity is managing the award in compliance with federal laws, regulations, and the award's terms and conditions. Condition: The District’s internal controls over budgeting for federal grants are insufficient to ensure compliance with federal regulations and to stay within the budgetary limits established by the federal awards, as specified in the Mississippi Comprehensive Automated Performance-based System (MCAPS), administered through the Mississippi Department of Education. Specifically, the District has not adequately adhered to budgeting restraints outlined for its federal grants. Our audit procedures identified the following instances where actual expenditures appear to exceed the budgeted amounts: Six-line items in the ARP ESSER grant, totaling $115,645.51. Five-line items in the ESSER II grant, totaling $31,135.42 Three-line items in the Special Education IDEA Part B grant, totaling $9,474.44. One-line item in the Title I, Part A grant, totaling $8,640.88. Context/ Perspective: This finding is a result of our budget to actual comparisons for federal grant purposes of major programs and the conditions cited appear to be a systematic issue. Cause: The District did not properly monitor budget limits established in MCAPS to ensure that budgeting requirements were fulfilled. Effect: Failure to remain within established budget limits in MCAPS could affect future eligibility for federal award programs or result in a loss or misappropriation of public assets. Questioned Costs: $146,780.93 (ESSER II and ARP ESSER) Recommendation: The District should establish additional internal controls to ensure that it remains within budget limits for each grant maintained in MCAPS. Views of Responsible Officials: The Auditee’s Corrective Action Plan lists the District’s response to the findings.
Material Weakness Material Noncompliance Program: Assistance Listing 84.010A - Title I Grants To Local Educational Agencies Assistance Listing: 84.027/84.027X/84.173/84.173X – Special Education Cluster (IDEA) Assistance Listing: 84.425D– Elementary and Secondary School Emergency Relief Fund (ESSER II) Assistance Listing: 84.425U– Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Repeat Finding: Yes Criteria: 2 CFR 200.302 and 2 CFR 200.303 outline key requirements for non-federal entities managing federal awards. Section 200.302 mandates that a financial management system be in place to prepare reports as required by both general and program-specific terms and conditions. It also requires tracing funds to a level of expenditure that demonstrates compliance with federal statutes, regulations, and the terms of the federal award, including comparing expenditures with the budget for each federal award. Section 200.303 requires non-federal entities to establish and maintain effective internal controls over federal awards, ensuring reasonable assurance that the entity is managing the award in compliance with federal laws, regulations, and the award's terms and conditions. Condition: The District’s internal controls over budgeting for federal grants are insufficient to ensure compliance with federal regulations and to stay within the budgetary limits established by the federal awards, as specified in the Mississippi Comprehensive Automated Performance-based System (MCAPS), administered through the Mississippi Department of Education. Specifically, the District has not adequately adhered to budgeting restraints outlined for its federal grants. Our audit procedures identified the following instances where actual expenditures appear to exceed the budgeted amounts: Six-line items in the ARP ESSER grant, totaling $115,645.51. Five-line items in the ESSER II grant, totaling $31,135.42 Three-line items in the Special Education IDEA Part B grant, totaling $9,474.44. One-line item in the Title I, Part A grant, totaling $8,640.88. Context/ Perspective: This finding is a result of our budget to actual comparisons for federal grant purposes of major programs and the conditions cited appear to be a systematic issue. Cause: The District did not properly monitor budget limits established in MCAPS to ensure that budgeting requirements were fulfilled. Effect: Failure to remain within established budget limits in MCAPS could affect future eligibility for federal award programs or result in a loss or misappropriation of public assets. Questioned Costs: $146,780.93 (ESSER II and ARP ESSER) Recommendation: The District should establish additional internal controls to ensure that it remains within budget limits for each grant maintained in MCAPS. Views of Responsible Officials: The Auditee’s Corrective Action Plan lists the District’s response to the findings.
Material Weakness Material Noncompliance Program: Assistance Listing 84.010A - Title I Grants To Local Educational Agencies Assistance Listing: 84.027/84.027X/84.173/84.173X – Special Education Cluster (IDEA) Assistance Listing: 84.425D– Elementary and Secondary School Emergency Relief Fund (ESSER II) Assistance Listing: 84.425U– Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Repeat Finding: Yes Criteria: 2 CFR 200.302 and 2 CFR 200.303 outline key requirements for non-federal entities managing federal awards. Section 200.302 mandates that a financial management system be in place to prepare reports as required by both general and program-specific terms and conditions. It also requires tracing funds to a level of expenditure that demonstrates compliance with federal statutes, regulations, and the terms of the federal award, including comparing expenditures with the budget for each federal award. Section 200.303 requires non-federal entities to establish and maintain effective internal controls over federal awards, ensuring reasonable assurance that the entity is managing the award in compliance with federal laws, regulations, and the award's terms and conditions. Condition: The District’s internal controls over budgeting for federal grants are insufficient to ensure compliance with federal regulations and to stay within the budgetary limits established by the federal awards, as specified in the Mississippi Comprehensive Automated Performance-based System (MCAPS), administered through the Mississippi Department of Education. Specifically, the District has not adequately adhered to budgeting restraints outlined for its federal grants. Our audit procedures identified the following instances where actual expenditures appear to exceed the budgeted amounts: Six-line items in the ARP ESSER grant, totaling $115,645.51. Five-line items in the ESSER II grant, totaling $31,135.42 Three-line items in the Special Education IDEA Part B grant, totaling $9,474.44. One-line item in the Title I, Part A grant, totaling $8,640.88. Context/ Perspective: This finding is a result of our budget to actual comparisons for federal grant purposes of major programs and the conditions cited appear to be a systematic issue. Cause: The District did not properly monitor budget limits established in MCAPS to ensure that budgeting requirements were fulfilled. Effect: Failure to remain within established budget limits in MCAPS could affect future eligibility for federal award programs or result in a loss or misappropriation of public assets. Questioned Costs: $146,780.93 (ESSER II and ARP ESSER) Recommendation: The District should establish additional internal controls to ensure that it remains within budget limits for each grant maintained in MCAPS. Views of Responsible Officials: The Auditee’s Corrective Action Plan lists the District’s response to the findings.