2024-003. FINDING (Noncompliance with Gramm-Leach-Bliley Act) Federal Department: U.S. Department of Education, U.S. Department of Health and Human Services Assistance Listing Number: 84.268, 84.063, 84.038, 84.033, 84.007, 84.379, 93.925, 93.264 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans, Federal Pell Grant Program, Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Teacher Education Assistance for College and Higher Education Grants, Scholarships for Health Professions Students from Disadvantaged Backgrounds, and Nurse Faculty Loan Program Award Numbers: P268K240567, P268K230567, P063P230567, P063P220567, P033A231156, P033A221156, P007A231156, P007A221156, P379T240567, 5 T08HP39308‐04‐00, and E01HP27019 Questioned Cost: None Program Expenditures: $21,113,430; $7,760,752; $1,938,618; $512,881; $227,850; $31,236; $576,000; $621,137 Cluster Expenditures: $32,781,904 Governors State University (University) did not establish a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in their control. CONDITION During our audit, we noted the University was unable to complete the development of the written incident response plan as of the end of the audit period. CRITERIA On December 9, 2021, the Federal Trade Commission issued final regulations to amend the Standards for Safeguarding Customer Information (Safeguards Rule), an important component of the Gramm-Leach-Bliley Act’s (GLBA) requirements for protecting the privacy and personal information of consumers. The Code of Federal Regulations (16 CFR 314.4(h)) requires the University to develop, implement and maintain an information security program which includes establishing a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in its control. At a minimum, such incident response plan shall address the following areas: • the goals of the incident response plan; • the internal processes for responding to a security event; • the definition of clear roles, responsibilities, and levels of decision-making authority; • external and internal communications and information sharing; • identification of requirements for the remediation of any identified weaknesses in information systems and associated controls; • documentation and reporting regarding security events and related incident response activities; and • the evaluation and revision as necessary of the incident response plan following a security event. Additionally, the Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. CAUSE University officials stated the University has been actively engaged in the development of a written incident response plan; however, the plan was not completed by the end of Fiscal Year 2024 due to the extensive range of tasks required for its completion. EFFECT The intent of the GLBA Safeguards Rule is to enhance security over confidential information. Without a documented response to all applicable requirements, the University is more susceptible to vulnerabilities as it relates to protecting the privacy and personal information of students than it will be following full implementation. (Finding Code No. 2024-003, 2023-003) RECOMMENDATION We recommend the University continue towards completion and full implementation of the written incident response plan. UNIVERSITY RESPONSE The University agrees with this finding and accepts the recommendation. The University has recently completed the development of the written incident response plan during Fiscal Year 2025.
2024-003. FINDING (Noncompliance with Gramm-Leach-Bliley Act) Federal Department: U.S. Department of Education, U.S. Department of Health and Human Services Assistance Listing Number: 84.268, 84.063, 84.038, 84.033, 84.007, 84.379, 93.925, 93.264 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans, Federal Pell Grant Program, Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Teacher Education Assistance for College and Higher Education Grants, Scholarships for Health Professions Students from Disadvantaged Backgrounds, and Nurse Faculty Loan Program Award Numbers: P268K240567, P268K230567, P063P230567, P063P220567, P033A231156, P033A221156, P007A231156, P007A221156, P379T240567, 5 T08HP39308‐04‐00, and E01HP27019 Questioned Cost: None Program Expenditures: $21,113,430; $7,760,752; $1,938,618; $512,881; $227,850; $31,236; $576,000; $621,137 Cluster Expenditures: $32,781,904 Governors State University (University) did not establish a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in their control. CONDITION During our audit, we noted the University was unable to complete the development of the written incident response plan as of the end of the audit period. CRITERIA On December 9, 2021, the Federal Trade Commission issued final regulations to amend the Standards for Safeguarding Customer Information (Safeguards Rule), an important component of the Gramm-Leach-Bliley Act’s (GLBA) requirements for protecting the privacy and personal information of consumers. The Code of Federal Regulations (16 CFR 314.4(h)) requires the University to develop, implement and maintain an information security program which includes establishing a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in its control. At a minimum, such incident response plan shall address the following areas: • the goals of the incident response plan; • the internal processes for responding to a security event; • the definition of clear roles, responsibilities, and levels of decision-making authority; • external and internal communications and information sharing; • identification of requirements for the remediation of any identified weaknesses in information systems and associated controls; • documentation and reporting regarding security events and related incident response activities; and • the evaluation and revision as necessary of the incident response plan following a security event. Additionally, the Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. CAUSE University officials stated the University has been actively engaged in the development of a written incident response plan; however, the plan was not completed by the end of Fiscal Year 2024 due to the extensive range of tasks required for its completion. EFFECT The intent of the GLBA Safeguards Rule is to enhance security over confidential information. Without a documented response to all applicable requirements, the University is more susceptible to vulnerabilities as it relates to protecting the privacy and personal information of students than it will be following full implementation. (Finding Code No. 2024-003, 2023-003) RECOMMENDATION We recommend the University continue towards completion and full implementation of the written incident response plan. UNIVERSITY RESPONSE The University agrees with this finding and accepts the recommendation. The University has recently completed the development of the written incident response plan during Fiscal Year 2025.
2024-003. FINDING (Noncompliance with Gramm-Leach-Bliley Act) Federal Department: U.S. Department of Education, U.S. Department of Health and Human Services Assistance Listing Number: 84.268, 84.063, 84.038, 84.033, 84.007, 84.379, 93.925, 93.264 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans, Federal Pell Grant Program, Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Teacher Education Assistance for College and Higher Education Grants, Scholarships for Health Professions Students from Disadvantaged Backgrounds, and Nurse Faculty Loan Program Award Numbers: P268K240567, P268K230567, P063P230567, P063P220567, P033A231156, P033A221156, P007A231156, P007A221156, P379T240567, 5 T08HP39308‐04‐00, and E01HP27019 Questioned Cost: None Program Expenditures: $21,113,430; $7,760,752; $1,938,618; $512,881; $227,850; $31,236; $576,000; $621,137 Cluster Expenditures: $32,781,904 Governors State University (University) did not establish a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in their control. CONDITION During our audit, we noted the University was unable to complete the development of the written incident response plan as of the end of the audit period. CRITERIA On December 9, 2021, the Federal Trade Commission issued final regulations to amend the Standards for Safeguarding Customer Information (Safeguards Rule), an important component of the Gramm-Leach-Bliley Act’s (GLBA) requirements for protecting the privacy and personal information of consumers. The Code of Federal Regulations (16 CFR 314.4(h)) requires the University to develop, implement and maintain an information security program which includes establishing a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in its control. At a minimum, such incident response plan shall address the following areas: • the goals of the incident response plan; • the internal processes for responding to a security event; • the definition of clear roles, responsibilities, and levels of decision-making authority; • external and internal communications and information sharing; • identification of requirements for the remediation of any identified weaknesses in information systems and associated controls; • documentation and reporting regarding security events and related incident response activities; and • the evaluation and revision as necessary of the incident response plan following a security event. Additionally, the Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. CAUSE University officials stated the University has been actively engaged in the development of a written incident response plan; however, the plan was not completed by the end of Fiscal Year 2024 due to the extensive range of tasks required for its completion. EFFECT The intent of the GLBA Safeguards Rule is to enhance security over confidential information. Without a documented response to all applicable requirements, the University is more susceptible to vulnerabilities as it relates to protecting the privacy and personal information of students than it will be following full implementation. (Finding Code No. 2024-003, 2023-003) RECOMMENDATION We recommend the University continue towards completion and full implementation of the written incident response plan. UNIVERSITY RESPONSE The University agrees with this finding and accepts the recommendation. The University has recently completed the development of the written incident response plan during Fiscal Year 2025.
2024-003. FINDING (Noncompliance with Gramm-Leach-Bliley Act) Federal Department: U.S. Department of Education, U.S. Department of Health and Human Services Assistance Listing Number: 84.268, 84.063, 84.038, 84.033, 84.007, 84.379, 93.925, 93.264 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans, Federal Pell Grant Program, Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Teacher Education Assistance for College and Higher Education Grants, Scholarships for Health Professions Students from Disadvantaged Backgrounds, and Nurse Faculty Loan Program Award Numbers: P268K240567, P268K230567, P063P230567, P063P220567, P033A231156, P033A221156, P007A231156, P007A221156, P379T240567, 5 T08HP39308‐04‐00, and E01HP27019 Questioned Cost: None Program Expenditures: $21,113,430; $7,760,752; $1,938,618; $512,881; $227,850; $31,236; $576,000; $621,137 Cluster Expenditures: $32,781,904 Governors State University (University) did not establish a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in their control. CONDITION During our audit, we noted the University was unable to complete the development of the written incident response plan as of the end of the audit period. CRITERIA On December 9, 2021, the Federal Trade Commission issued final regulations to amend the Standards for Safeguarding Customer Information (Safeguards Rule), an important component of the Gramm-Leach-Bliley Act’s (GLBA) requirements for protecting the privacy and personal information of consumers. The Code of Federal Regulations (16 CFR 314.4(h)) requires the University to develop, implement and maintain an information security program which includes establishing a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in its control. At a minimum, such incident response plan shall address the following areas: • the goals of the incident response plan; • the internal processes for responding to a security event; • the definition of clear roles, responsibilities, and levels of decision-making authority; • external and internal communications and information sharing; • identification of requirements for the remediation of any identified weaknesses in information systems and associated controls; • documentation and reporting regarding security events and related incident response activities; and • the evaluation and revision as necessary of the incident response plan following a security event. Additionally, the Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. CAUSE University officials stated the University has been actively engaged in the development of a written incident response plan; however, the plan was not completed by the end of Fiscal Year 2024 due to the extensive range of tasks required for its completion. EFFECT The intent of the GLBA Safeguards Rule is to enhance security over confidential information. Without a documented response to all applicable requirements, the University is more susceptible to vulnerabilities as it relates to protecting the privacy and personal information of students than it will be following full implementation. (Finding Code No. 2024-003, 2023-003) RECOMMENDATION We recommend the University continue towards completion and full implementation of the written incident response plan. UNIVERSITY RESPONSE The University agrees with this finding and accepts the recommendation. The University has recently completed the development of the written incident response plan during Fiscal Year 2025.
2024-003. FINDING (Noncompliance with Gramm-Leach-Bliley Act) Federal Department: U.S. Department of Education, U.S. Department of Health and Human Services Assistance Listing Number: 84.268, 84.063, 84.038, 84.033, 84.007, 84.379, 93.925, 93.264 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans, Federal Pell Grant Program, Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Teacher Education Assistance for College and Higher Education Grants, Scholarships for Health Professions Students from Disadvantaged Backgrounds, and Nurse Faculty Loan Program Award Numbers: P268K240567, P268K230567, P063P230567, P063P220567, P033A231156, P033A221156, P007A231156, P007A221156, P379T240567, 5 T08HP39308‐04‐00, and E01HP27019 Questioned Cost: None Program Expenditures: $21,113,430; $7,760,752; $1,938,618; $512,881; $227,850; $31,236; $576,000; $621,137 Cluster Expenditures: $32,781,904 Governors State University (University) did not establish a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in their control. CONDITION During our audit, we noted the University was unable to complete the development of the written incident response plan as of the end of the audit period. CRITERIA On December 9, 2021, the Federal Trade Commission issued final regulations to amend the Standards for Safeguarding Customer Information (Safeguards Rule), an important component of the Gramm-Leach-Bliley Act’s (GLBA) requirements for protecting the privacy and personal information of consumers. The Code of Federal Regulations (16 CFR 314.4(h)) requires the University to develop, implement and maintain an information security program which includes establishing a written incident response plan designed to promptly respond to, and recover from, any security event materially affecting the confidentiality, integrity, or availability of customer information in its control. At a minimum, such incident response plan shall address the following areas: • the goals of the incident response plan; • the internal processes for responding to a security event; • the definition of clear roles, responsibilities, and levels of decision-making authority; • external and internal communications and information sharing; • identification of requirements for the remediation of any identified weaknesses in information systems and associated controls; • documentation and reporting regarding security events and related incident response activities; and • the evaluation and revision as necessary of the incident response plan following a security event. Additionally, the Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. CAUSE University officials stated the University has been actively engaged in the development of a written incident response plan; however, the plan was not completed by the end of Fiscal Year 2024 due to the extensive range of tasks required for its completion. EFFECT The intent of the GLBA Safeguards Rule is to enhance security over confidential information. Without a documented response to all applicable requirements, the University is more susceptible to vulnerabilities as it relates to protecting the privacy and personal information of students than it will be following full implementation. (Finding Code No. 2024-003, 2023-003) RECOMMENDATION We recommend the University continue towards completion and full implementation of the written incident response plan. UNIVERSITY RESPONSE The University agrees with this finding and accepts the recommendation. The University has recently completed the development of the written incident response plan during Fiscal Year 2025.
2024-005. FINDING (Failure to Retain Adequate Documentation of Internal Direct Loans Reconciliation) Federal Department: U.S. Department of Education Assistance Listing Number: 84.268 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans Award Numbers: P268K240567, P268K230567 Questioned Cost: None Program Expenditures: $21,113,430 Cluster Expenditures: $32,781,904 Governors State University (University) did not retain documentation of its internal monthly Direct Loans reconciliation to demonstrate timely completion. CONDITION During testing of Direct Loans, we were unable to verify whether the University completed the monthly internal reconciliation in a timely manner due to the absence of supporting documentation. CRITERIA The Federal Student Aid (FSA) issued Electronic Announcement General-22-86 covering reconciliation requirements for all Title IV programs between Department of Education’s G5 system records and the University’s internal records. It further requires the University to reconcile internally, disbursement data between Financial Services and Comptroller Office and Financial Aid Office. Additionally, the Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. CAUSE University officials stated the University performs the monthly internal reconciliation process. However, the monthly internal reconciliation spreadsheet is updated each month without retaining the prior versions. EFFECT Failure to properly document internal monthly reconciliations between the Financial Services and Comptroller Office and Financial Aid Office may result in inaccurate and incomplete financial information. (Finding Code No. 2024-005) RECOMMENDATION We recommend the University improve its procedures to ensure documentation is retained to demonstrate timely completion of reconciliations. UNIVERSITY RESPONSE The University agrees with this finding and accepts the recommendation. Existing procedures have been revised to require the retention of internal reconciliation records on a monthly basis.
2024-007. FINDING (Noncompliance with Activities Allowed or Unallowed and Allowable Costs and Cost Principles Requirements) Federal Department: U.S. Department of Education Assistance Listing Number: 84.425D Cluster Name: Education Stabilization Fund Program Name: Elementary and Secondary School Emergency Relief Fund Award Number: S425D210041 Questioned Cost: None Program Expenditures: $1,222,010 Cluster Expenditures: $1,466,030 Governors State University (University) did not comply with activities allowed or unallowed and allowable costs and cost principles requirements. CONDITION During our review of the Illinois Tutoring Initiative program under the Elementary and Secondary School Emergency Relief (ESSER) Fund which had total expenditures of $1,222,010, we identified 1 of 25 (4%) expenditures was inappropriately charged to the grant. The University inadvertently charged Central Management Services (CMS) insurance of $414 for an employee who did not work on the program. The sample was not intended to be, and was not, a statistically valid sample. CRITERIA The Code of Federal Regulations (2 CFR 200.431(c)) requires the University to allocate fringe benefits to federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such federal awards and other activities, and charged as direct or indirect costs following the University's accounting practices. Additionally, the Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with federal laws, statutes, regulations, and the terms and conditions of the federal award. CAUSE University officials stated the charge was meant for a different federal grant, but was inadvertently assigned to the ESSER grant due to a formula error in the supporting spreadsheet. EFFECT Failure to accurately charge the correct grant may result in disallowance of federal expenditures and questioned costs, and could jeopardize future federal funding. (Finding Code No. 2024-007) RECOMMENDATION We recommend the University improve its procedures to ensure fringe benefits allocated to the grant align consistently with the salaries and wages charged to the grant. UNIVERSITY RESPONSE The University agrees with this finding and accepts the recommendation. More stringent review procedures have been implemented to prevent the recurrence of this issue.
Finding Number: 2024-002 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles, Matching, and Program Income Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: 2 CFR section 200.302, Financial Management, states that the recipient’s financial management system must provide for the following: Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, as well as expenditures and income. All records must be supported by source documentation. There must be written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. 2 CFR section 200.303, Internal Controls, states grant recipient 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. Cause: The organization does not have an effective reconciliation and review process required to track compliance requirements that adhere to Uniform Guidance and the grant terms. Match expenditures could not be reconciled to the Service Invoice Summaries. In addition, the methodology used to allocate program income, matching, and non-payroll expenditures was not consistently applied. Effect or Potential Effect: Potential for unallowable activities and unallowable costs, not meeting matching requirements per grant terms, and potential for program income to be understated or overstated. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization implement policies and procedures to ensure proper reconciliation and review of Service Invoice Summaries are effective and specific to grant View of Responsible Officials: In response to finding number 2024-002, there is no disagreement with the audit finding. Management is in the process of drafting new policies and procedures to ensure that the amount, source, and expenditure of Federal funds for all Federal awards is identified; and will track and verify expenditures and income. In addition, Management is developing a process and procedures to verify compliance with Federal statues, regulations, and the terms and conditions of each Federal award. Management will complete the Corrective Action Plan by February 28, 2025 and these procedures will be in full effect for the fiscal year 2025.
Finding Number: 2024-002 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles, Matching, and Program Income Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: 2 CFR section 200.302, Financial Management, states that the recipient’s financial management system must provide for the following: Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, as well as expenditures and income. All records must be supported by source documentation. There must be written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. 2 CFR section 200.303, Internal Controls, states grant recipient 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. Cause: The organization does not have an effective reconciliation and review process required to track compliance requirements that adhere to Uniform Guidance and the grant terms. Match expenditures could not be reconciled to the Service Invoice Summaries. In addition, the methodology used to allocate program income, matching, and non-payroll expenditures was not consistently applied. Effect or Potential Effect: Potential for unallowable activities and unallowable costs, not meeting matching requirements per grant terms, and potential for program income to be understated or overstated. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization implement policies and procedures to ensure proper reconciliation and review of Service Invoice Summaries are effective and specific to grant View of Responsible Officials: In response to finding number 2024-002, there is no disagreement with the audit finding. Management is in the process of drafting new policies and procedures to ensure that the amount, source, and expenditure of Federal funds for all Federal awards is identified; and will track and verify expenditures and income. In addition, Management is developing a process and procedures to verify compliance with Federal statues, regulations, and the terms and conditions of each Federal award. Management will complete the Corrective Action Plan by February 28, 2025 and these procedures will be in full effect for the fiscal year 2025.
Finding Number: 2024-002 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles, Matching, and Program Income Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: 2 CFR section 200.302, Financial Management, states that the recipient’s financial management system must provide for the following: Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, as well as expenditures and income. All records must be supported by source documentation. There must be written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. 2 CFR section 200.303, Internal Controls, states grant recipient 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. Cause: The organization does not have an effective reconciliation and review process required to track compliance requirements that adhere to Uniform Guidance and the grant terms. Match expenditures could not be reconciled to the Service Invoice Summaries. In addition, the methodology used to allocate program income, matching, and non-payroll expenditures was not consistently applied. Effect or Potential Effect: Potential for unallowable activities and unallowable costs, not meeting matching requirements per grant terms, and potential for program income to be understated or overstated. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization implement policies and procedures to ensure proper reconciliation and review of Service Invoice Summaries are effective and specific to grant View of Responsible Officials: In response to finding number 2024-002, there is no disagreement with the audit finding. Management is in the process of drafting new policies and procedures to ensure that the amount, source, and expenditure of Federal funds for all Federal awards is identified; and will track and verify expenditures and income. In addition, Management is developing a process and procedures to verify compliance with Federal statues, regulations, and the terms and conditions of each Federal award. Management will complete the Corrective Action Plan by February 28, 2025 and these procedures will be in full effect for the fiscal year 2025.
Finding Number: 2024-002 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles, Matching, and Program Income Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: 2 CFR section 200.302, Financial Management, states that the recipient’s financial management system must provide for the following: Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, as well as expenditures and income. All records must be supported by source documentation. There must be written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. 2 CFR section 200.303, Internal Controls, states grant recipient 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. Cause: The organization does not have an effective reconciliation and review process required to track compliance requirements that adhere to Uniform Guidance and the grant terms. Match expenditures could not be reconciled to the Service Invoice Summaries. In addition, the methodology used to allocate program income, matching, and non-payroll expenditures was not consistently applied. Effect or Potential Effect: Potential for unallowable activities and unallowable costs, not meeting matching requirements per grant terms, and potential for program income to be understated or overstated. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization implement policies and procedures to ensure proper reconciliation and review of Service Invoice Summaries are effective and specific to grant View of Responsible Officials: In response to finding number 2024-002, there is no disagreement with the audit finding. Management is in the process of drafting new policies and procedures to ensure that the amount, source, and expenditure of Federal funds for all Federal awards is identified; and will track and verify expenditures and income. In addition, Management is developing a process and procedures to verify compliance with Federal statues, regulations, and the terms and conditions of each Federal award. Management will complete the Corrective Action Plan by February 28, 2025 and these procedures will be in full effect for the fiscal year 2025.
Finding Number: 2024-002 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles, Matching, and Program Income Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: 2 CFR section 200.302, Financial Management, states that the recipient’s financial management system must provide for the following: Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, as well as expenditures and income. All records must be supported by source documentation. There must be written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. 2 CFR section 200.303, Internal Controls, states grant recipient 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. Cause: The organization does not have an effective reconciliation and review process required to track compliance requirements that adhere to Uniform Guidance and the grant terms. Match expenditures could not be reconciled to the Service Invoice Summaries. In addition, the methodology used to allocate program income, matching, and non-payroll expenditures was not consistently applied. Effect or Potential Effect: Potential for unallowable activities and unallowable costs, not meeting matching requirements per grant terms, and potential for program income to be understated or overstated. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization implement policies and procedures to ensure proper reconciliation and review of Service Invoice Summaries are effective and specific to grant View of Responsible Officials: In response to finding number 2024-002, there is no disagreement with the audit finding. Management is in the process of drafting new policies and procedures to ensure that the amount, source, and expenditure of Federal funds for all Federal awards is identified; and will track and verify expenditures and income. In addition, Management is developing a process and procedures to verify compliance with Federal statues, regulations, and the terms and conditions of each Federal award. Management will complete the Corrective Action Plan by February 28, 2025 and these procedures will be in full effect for the fiscal year 2025.
Finding Number: 2024-002 Significant Deficiency – Internal Controls over Compliance and Compliance of: Activities Allowed or Unallowed and Allowable Costs/Cost Principles, Matching, and Program Income Federal Award: Aging Cluster, No. 93.045, Special Programs for the Aging, Title III, Part C Federal Agency: Department of Health and Human Services Pass-Through Entity: Monterey County Area Agency on Aging Criteria or Specific Requirement: 2 CFR section 200.302, Financial Management, states that the recipient’s financial management system must provide for the following: Maintaining records that sufficiently identify the amount, source, and expenditure of Federal funds for Federal awards. These records must contain information necessary to identify Federal awards, authorizations, financial obligations, as well as expenditures and income. All records must be supported by source documentation. There must be written procedures for determining the allowability of costs in accordance with subpart E and the terms and conditions of the Federal award. 2 CFR section 200.303, Internal Controls, states grant recipient 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. Cause: The organization does not have an effective reconciliation and review process required to track compliance requirements that adhere to Uniform Guidance and the grant terms. Match expenditures could not be reconciled to the Service Invoice Summaries. In addition, the methodology used to allocate program income, matching, and non-payroll expenditures was not consistently applied. Effect or Potential Effect: Potential for unallowable activities and unallowable costs, not meeting matching requirements per grant terms, and potential for program income to be understated or overstated. Questioned Costs: Related questioned costs are unknown. Context: During the year under audit, the issues represent a systemic problem. Recommendation: We recommend the Organization implement policies and procedures to ensure proper reconciliation and review of Service Invoice Summaries are effective and specific to grant View of Responsible Officials: In response to finding number 2024-002, there is no disagreement with the audit finding. Management is in the process of drafting new policies and procedures to ensure that the amount, source, and expenditure of Federal funds for all Federal awards is identified; and will track and verify expenditures and income. In addition, Management is developing a process and procedures to verify compliance with Federal statues, regulations, and the terms and conditions of each Federal award. Management will complete the Corrective Action Plan by February 28, 2025 and these procedures will be in full effect for the fiscal year 2025.
2024 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425U210013 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "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). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $365,489. Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: Yes – 2023-002. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 002: Special Tests and Provisions Federal Agency: U.S Department Education Federal Program Name: Education Stabilization Funds Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425U210013 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Other Matters Criteria or specific requirement: Per 2 CFR 200.303, "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). If governors, SEAs, and or subrecipients propose to use ESF funds for construction they must also comply with applicable requirements in 34 CFR section 76.600 and 34 CFR sections 75.600–617. Approved construction projects must comply with all other applicable Uniform Guidance requirements, as well as the ED’s regulations regarding construction, as applicable, at 34 CFR section 76.600. As is the case with all construction contracts using laborers and mechanics financed by federal education funds, recipients and subrecipients that use ESF funds for construction contracts over $2,000 must meet Davis-Bacon prevailing wage requirements. Condition: PLA did not verify compliance with prevailing wage requirements with subcontractors for construction projects financed by federal education funds. Questioned costs: $365,489. Context: 1 of 1 construction projects financed by federal education funds were subject to prevailing wage requirements. Cause: PLA was not familiar with using federal education funds for construction costs and were not aware of the prevailing wage requirements Effect: Laborers and mechanics paid by subcontractors may have been paid below prevailing wage rates. Repeat Finding: Yes – 2023-002. Recommendation: We recommend that for future construction contracts financed by federal education funds PLA verify that subcontractors comply with prevailing wage requirements. Views of responsible officials: There is no disagreement with the audit finding.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Material Weakness Federal Program(s): Research and Development Cluster Mental and Behavioral Health Education and Training Grants Assistance Listing Number(s): Research and Development Cluster • 11.417 • 12.420 • 12.905 • 84.116Z • 84.019A • 47.076 • 47.050 Mental and Behavioral Health Education and Training Grants • 93.732 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Timesheets and time and effort reports used to track time spent on federal programs did not have approval signatures by the employee’s supervisor. Cause: Ineffective design and implementation of internal controls around approval of timesheets and time and effort reports. Effect or Potential Effect: Ineffective control procedures could result in unallowable costs or activities being charged to federal grant programs. Questioned Costs: None Context: In our sample of 10 payroll transactions of amounts charged to the Research and Development Cluster, 9 of the timesheets or time and effort reports did not have physical indication of review by their supervisors. In our sample of 6 payroll transactions of amounts charged to the Mental and Behavioral Health Education and Training grants, none of the timesheets or time and effort reports had physical indication of review by their supervisors. Repeat Finding: No Recommendation: We recommend the College enforce its policy to have physical signatures on each employee’s timesheet or time and effort report after the review takes place to ensure salary costs charged to the federal program are allowable. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-007: Student Credit Balances from Title IV Awards Significant Deficiency Federal Program: Student Financial Assistance Cluster Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. The College does not have a control in place with physical indication of review over refund process for student credit balances. Cause: Lack of control in place over refunds from student credit balances Effect or Potential Effect: Student credit balances may not be refunded within the 14-day requirement. Questioned Costs: None Context: During our control assessment over student credit balance refunds, we noted there is no control in place and no physical indication of review taking place to ensure student credit balances are properly refunded within the 14-day requirement. Repeat Finding: No Recommendation: We recommend the College review its process and controls in place for student credit balances to include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-007: Student Credit Balances from Title IV Awards Significant Deficiency Federal Program: Student Financial Assistance Cluster Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. The College does not have a control in place with physical indication of review over refund process for student credit balances. Cause: Lack of control in place over refunds from student credit balances Effect or Potential Effect: Student credit balances may not be refunded within the 14-day requirement. Questioned Costs: None Context: During our control assessment over student credit balance refunds, we noted there is no control in place and no physical indication of review taking place to ensure student credit balances are properly refunded within the 14-day requirement. Repeat Finding: No Recommendation: We recommend the College review its process and controls in place for student credit balances to include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-007: Student Credit Balances from Title IV Awards Significant Deficiency Federal Program: Student Financial Assistance Cluster Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. The College does not have a control in place with physical indication of review over refund process for student credit balances. Cause: Lack of control in place over refunds from student credit balances Effect or Potential Effect: Student credit balances may not be refunded within the 14-day requirement. Questioned Costs: None Context: During our control assessment over student credit balance refunds, we noted there is no control in place and no physical indication of review taking place to ensure student credit balances are properly refunded within the 14-day requirement. Repeat Finding: No Recommendation: We recommend the College review its process and controls in place for student credit balances to include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-007: Student Credit Balances from Title IV Awards Significant Deficiency Federal Program: Student Financial Assistance Cluster Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. The College does not have a control in place with physical indication of review over refund process for student credit balances. Cause: Lack of control in place over refunds from student credit balances Effect or Potential Effect: Student credit balances may not be refunded within the 14-day requirement. Questioned Costs: None Context: During our control assessment over student credit balance refunds, we noted there is no control in place and no physical indication of review taking place to ensure student credit balances are properly refunded within the 14-day requirement. Repeat Finding: No Recommendation: We recommend the College review its process and controls in place for student credit balances to include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-007: Student Credit Balances from Title IV Awards Significant Deficiency Federal Program: Student Financial Assistance Cluster Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. The College does not have a control in place with physical indication of review over refund process for student credit balances. Cause: Lack of control in place over refunds from student credit balances Effect or Potential Effect: Student credit balances may not be refunded within the 14-day requirement. Questioned Costs: None Context: During our control assessment over student credit balance refunds, we noted there is no control in place and no physical indication of review taking place to ensure student credit balances are properly refunded within the 14-day requirement. Repeat Finding: No Recommendation: We recommend the College review its process and controls in place for student credit balances to include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-007: Student Credit Balances from Title IV Awards Significant Deficiency Federal Program: Student Financial Assistance Cluster Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. The College does not have a control in place with physical indication of review over refund process for student credit balances. Cause: Lack of control in place over refunds from student credit balances Effect or Potential Effect: Student credit balances may not be refunded within the 14-day requirement. Questioned Costs: None Context: During our control assessment over student credit balance refunds, we noted there is no control in place and no physical indication of review taking place to ensure student credit balances are properly refunded within the 14-day requirement. Repeat Finding: No Recommendation: We recommend the College review its process and controls in place for student credit balances to include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
2024-007: Student Credit Balances from Title IV Awards Significant Deficiency Federal Program: Student Financial Assistance Cluster Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. The College does not have a control in place with physical indication of review over refund process for student credit balances. Cause: Lack of control in place over refunds from student credit balances Effect or Potential Effect: Student credit balances may not be refunded within the 14-day requirement. Questioned Costs: None Context: During our control assessment over student credit balance refunds, we noted there is no control in place and no physical indication of review taking place to ensure student credit balances are properly refunded within the 14-day requirement. Repeat Finding: No Recommendation: We recommend the College review its process and controls in place for student credit balances to include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
(2024-016) Title: Internal control over Unemployment Insurance financial reporting needs improvement Prior Year Findings: None State Department: Labor Administrative and Financial Services State Bureau: Unemployment Compensation Security and Employment Service Center Office of the State Controller Federal Agency: U.S. Department of Labor Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Assistance Listing Number: 17.225 Federal Award Identification Number: See E-77 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.510; Governmental Accounting, Auditing, and Financial Reporting (GAAFR), Part 5, Section A: Internal Control; State Administrative and Accounting Manual (SAAM) Chapter 80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must provide total Federal awards expended for each individual Federal program. The GAAFR states that a comprehensive framework of internal control is required to obtain reasonable assurance over financial reporting. The Office of the State Controller (OSC) has the responsibility to develop and maintain a system of internal controls and procedures to check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies for accounting and financial controls. Condition: The Security and Employment Service Center (SESC) is responsible for recording accounting transactions and reconciling balances between Federal funds and the State-funded Unemployment Insurance (UI) program under the Employment Security Fund (ESF). SESC is required to periodically record transfers of revenues and expenditures between Federal and State funds, which are separately presented in the State’s financial statements, but combined for SEFA reporting purposes. OSC compiles information collected from SESC in year-end closing packages for financial and SEFA reporting purposes. The Office of the State Auditor’s (OSA) audit of year-end account balances and related SEFA reporting identified a deposit of $11.6 million, representing a transfer between Federal and State UI funds, that was not accurately recorded. This resulted in the following errors: • ESF Cash & Short-Term Investments was overstated by $11.6 million, and Restricted Deposits & Investments was understated by $11.6 million on the State’s financial statements. • SEFA expenditures were overstated by $11.6 million. OSA proposed an audit adjustment to reclassify and correct the balances on the State’s financial statements and SEFA. The adjustment was recorded by OSC. Context: Before OSA’s proposed audit adjustment: • ESF Cash & Short-Term Investments and Restricted Deposits & Investments totaled $13 million and $735.2 million, respectively. • SEFA expenditures for the UI program totaled $150.7 million. Cause: Lack of supervisory oversight Effect: Before OSC corrected year-end account balances and related SEFA reporting: • ESF asset balances on the State’s financial statements were misclassified. • total expenditures reported on the SEFA were inaccurate. The SEFA is submitted to the Federal government, and errors in reporting may result in incorrect information used for programmatic, policy, or statistical purposes. Recommendation: We recommend that SESC and OSC enhance supervisory oversight to ensure that balances reported on the State’s financial statements and SEFA are accurate. Corrective Action Plan: See F-11 Management’s Response: The Department agrees with this finding. The department will further expand the procedures used to prepare and review the SEFA. Contact: Marilyn Leimbach, Director, Security and Employment Service Center, DFPS, DAFS, 207-248-2556 (State Number: 24-0308-02)
(2024-016) Title: Internal control over Unemployment Insurance financial reporting needs improvement Prior Year Findings: None State Department: Labor Administrative and Financial Services State Bureau: Unemployment Compensation Security and Employment Service Center Office of the State Controller Federal Agency: U.S. Department of Labor Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Assistance Listing Number: 17.225 Federal Award Identification Number: See E-77 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.510; Governmental Accounting, Auditing, and Financial Reporting (GAAFR), Part 5, Section A: Internal Control; State Administrative and Accounting Manual (SAAM) Chapter 80 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the State’s financial statements which must include the total Federal awards expended. At a minimum, the SEFA must provide total Federal awards expended for each individual Federal program. The GAAFR states that a comprehensive framework of internal control is required to obtain reasonable assurance over financial reporting. The Office of the State Controller (OSC) has the responsibility to develop and maintain a system of internal controls and procedures to check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies for accounting and financial controls. Condition: The Security and Employment Service Center (SESC) is responsible for recording accounting transactions and reconciling balances between Federal funds and the State-funded Unemployment Insurance (UI) program under the Employment Security Fund (ESF). SESC is required to periodically record transfers of revenues and expenditures between Federal and State funds, which are separately presented in the State’s financial statements, but combined for SEFA reporting purposes. OSC compiles information collected from SESC in year-end closing packages for financial and SEFA reporting purposes. The Office of the State Auditor’s (OSA) audit of year-end account balances and related SEFA reporting identified a deposit of $11.6 million, representing a transfer between Federal and State UI funds, that was not accurately recorded. This resulted in the following errors: • ESF Cash & Short-Term Investments was overstated by $11.6 million, and Restricted Deposits & Investments was understated by $11.6 million on the State’s financial statements. • SEFA expenditures were overstated by $11.6 million. OSA proposed an audit adjustment to reclassify and correct the balances on the State’s financial statements and SEFA. The adjustment was recorded by OSC. Context: Before OSA’s proposed audit adjustment: • ESF Cash & Short-Term Investments and Restricted Deposits & Investments totaled $13 million and $735.2 million, respectively. • SEFA expenditures for the UI program totaled $150.7 million. Cause: Lack of supervisory oversight Effect: Before OSC corrected year-end account balances and related SEFA reporting: • ESF asset balances on the State’s financial statements were misclassified. • total expenditures reported on the SEFA were inaccurate. The SEFA is submitted to the Federal government, and errors in reporting may result in incorrect information used for programmatic, policy, or statistical purposes. Recommendation: We recommend that SESC and OSC enhance supervisory oversight to ensure that balances reported on the State’s financial statements and SEFA are accurate. Corrective Action Plan: See F-11 Management’s Response: The Department agrees with this finding. The department will further expand the procedures used to prepare and review the SEFA. Contact: Marilyn Leimbach, Director, Security and Employment Service Center, DFPS, DAFS, 207-248-2556 (State Number: 24-0308-02)
(2024-022) Title: Internal control over SNAP eligibility determinations and benefit calculations needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Special tests and provisions Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.551 $12,335 Likely Questioned Costs: Undeterminable; incorrectly calculated Supplemental Nutrition Assistance Program (SNAP) benefits may result in overpayments or underpayments to clients. Since there are known overpayments and underpayments in our sample, a projection of questioned costs cannot be reasonably estimated. Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 272.10; 7 CFR 273.2 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. All State agencies must sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing and transmitting information concerning SNAP. A SNAP application form must be signed to establish a filing date and to determine the State agency’s deadline for acting on the form. The State agency shall not certify a household without a signed form. Condition: SNAP is administered by the Office for Family Independence (OFI) and provides monthly benefits to eligible households to purchase nutritious foods. OFI is required by Federal program regulations to utilize an automated information system for SNAP. The information system must maintain all case file information necessary to properly process eligibility determinations and benefit calculations. The Automated Client Eligibility System (ACES) is the information system used by OFI to automate SNAP operations. ACES relies on the maintenance of a complex framework of system results to make eligibility determinations and related benefit calculations. The Office of the State Auditor (OSA) tested 60 household monthly benefit payments to verify the accuracy of SNAP operations utilizing ACES, and identified the following: • Nine overpayments of monthly SNAP benefits, including: o four benefit overpayments totaling $5,806; the Department was unable to provide documentation to support the maximum income limit requirement. o two benefit overpayments totaling $2,714 where the clients’ application for benefit renewal did not include SNAP; however, the households were open to SNAP benefits. o two benefit overpayments totaling $2,349 due to manual processing errors. o one benefit overpayment totaling $1,041; the client’s signature on their application was missing, which makes them ineligible for SNAP benefits. • One $395 underpayment of a monthly SNAP benefit due to manual processing errors • One household with an overpayment of $425 and an underpayment of $69 due to manual processing errors • Three households received accurate monthly benefit payments; however, asset and expense information were not accurately reflected within ACES. OSA selected a non-statistical random sample. The Department does not have adequate policies and procedures in place to ensure that ACES case file modifications, whether manual or system interfaced, that result in adjustments to previously issued monthly SNAP benefits are appropriately processed. This includes a recalculation of previously issued benefits when case file modifications are processed, establishment of corresponding overpayments or underpayments, and related follow-up actions with households. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Known questioned costs • Potential future questioned costs and disallowances • Benefits may be incorrectly calculated, resulting in households being underpaid and/or overpaid. • Noncompliance with Federal regulations Recommendation: We recommend that the Department implement additional policies and procedures to ensure that: • case information entered into ACES is accurate; • automated eligibility determinations and benefit calculations are processed in accordance with Federal regulations; and • recalculations of previously issued benefits and related follow-up actions occur when case file modifications are retroactive. Corrective Action Plan: See F-13 Management’s Response: The Department partially agrees with this finding. Of the 60 cases reviewed, 13 (21.67%) had errors in calculations or documentation. The Department is confident that the staff followed correct procedures in providing the TANF funded resource guide in the first four cases cited. The errors in these cases were merely a lack of documentation. The Department agrees with the calculation errors in the following 7 cases (11.67% of the 60 reviewed). The Department has developed a corrective action plan to ensure compliance moving forward. Contact: Michael E. Downs, Senior Program Manager, SNAP, DHHS, 207-592-4850 Auditor’s Concluding Remarks: The Department states that they are “confident that the staff followed correct procedures” for the four benefit overpayments totaling $5,806 and that “errors in these cases were merely a lack of documentation;” however, the Department cannot substantiate that staff followed established procedures if there is a lack of documentation to support adherence to procedures. The finding remains as stated. (State Number: 24-1108-04)
(2024-022) Title: Internal control over SNAP eligibility determinations and benefit calculations needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Special tests and provisions Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.551 $12,335 Likely Questioned Costs: Undeterminable; incorrectly calculated Supplemental Nutrition Assistance Program (SNAP) benefits may result in overpayments or underpayments to clients. Since there are known overpayments and underpayments in our sample, a projection of questioned costs cannot be reasonably estimated. Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 272.10; 7 CFR 273.2 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. All State agencies must sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing and transmitting information concerning SNAP. A SNAP application form must be signed to establish a filing date and to determine the State agency’s deadline for acting on the form. The State agency shall not certify a household without a signed form. Condition: SNAP is administered by the Office for Family Independence (OFI) and provides monthly benefits to eligible households to purchase nutritious foods. OFI is required by Federal program regulations to utilize an automated information system for SNAP. The information system must maintain all case file information necessary to properly process eligibility determinations and benefit calculations. The Automated Client Eligibility System (ACES) is the information system used by OFI to automate SNAP operations. ACES relies on the maintenance of a complex framework of system results to make eligibility determinations and related benefit calculations. The Office of the State Auditor (OSA) tested 60 household monthly benefit payments to verify the accuracy of SNAP operations utilizing ACES, and identified the following: • Nine overpayments of monthly SNAP benefits, including: o four benefit overpayments totaling $5,806; the Department was unable to provide documentation to support the maximum income limit requirement. o two benefit overpayments totaling $2,714 where the clients’ application for benefit renewal did not include SNAP; however, the households were open to SNAP benefits. o two benefit overpayments totaling $2,349 due to manual processing errors. o one benefit overpayment totaling $1,041; the client’s signature on their application was missing, which makes them ineligible for SNAP benefits. • One $395 underpayment of a monthly SNAP benefit due to manual processing errors • One household with an overpayment of $425 and an underpayment of $69 due to manual processing errors • Three households received accurate monthly benefit payments; however, asset and expense information were not accurately reflected within ACES. OSA selected a non-statistical random sample. The Department does not have adequate policies and procedures in place to ensure that ACES case file modifications, whether manual or system interfaced, that result in adjustments to previously issued monthly SNAP benefits are appropriately processed. This includes a recalculation of previously issued benefits when case file modifications are processed, establishment of corresponding overpayments or underpayments, and related follow-up actions with households. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Known questioned costs • Potential future questioned costs and disallowances • Benefits may be incorrectly calculated, resulting in households being underpaid and/or overpaid. • Noncompliance with Federal regulations Recommendation: We recommend that the Department implement additional policies and procedures to ensure that: • case information entered into ACES is accurate; • automated eligibility determinations and benefit calculations are processed in accordance with Federal regulations; and • recalculations of previously issued benefits and related follow-up actions occur when case file modifications are retroactive. Corrective Action Plan: See F-13 Management’s Response: The Department partially agrees with this finding. Of the 60 cases reviewed, 13 (21.67%) had errors in calculations or documentation. The Department is confident that the staff followed correct procedures in providing the TANF funded resource guide in the first four cases cited. The errors in these cases were merely a lack of documentation. The Department agrees with the calculation errors in the following 7 cases (11.67% of the 60 reviewed). The Department has developed a corrective action plan to ensure compliance moving forward. Contact: Michael E. Downs, Senior Program Manager, SNAP, DHHS, 207-592-4850 Auditor’s Concluding Remarks: The Department states that they are “confident that the staff followed correct procedures” for the four benefit overpayments totaling $5,806 and that “errors in these cases were merely a lack of documentation;” however, the Department cannot substantiate that staff followed established procedures if there is a lack of documentation to support adherence to procedures. The finding remains as stated. (State Number: 24-1108-04)
(2024-023) Title: Internal control over SNAP deceased client cases needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.551 $11,080 Likely Questioned Costs: Undeterminable; the Office of the State Auditor (OSA) tested a sample of cases where Supplemental Nutrition Assistance Program (SNAP) benefits were issued after the client’s date of death (DOD). Issuance of benefits to a deceased client does not necessarily result in unallowable program costs, as the issued benefits may not be expended; therefore, an error rate cannot be applied to the population and a projection of questioned costs cannot be reasonably estimated. Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 272.8 and .14 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. State agency action on information items about recipient households shall include review of information and comparison of it to case record information. State agencies must initiate and pursue actions on recipient households within 45 days of the receipt of the information items. States shall establish a system to verify and ensure that benefits are not issued to individuals who are deceased. Condition: The Office for Family Independence (OFI) manages the Automated Client Eligibility System (ACES) used to determine eligibility for Federal assistance programs, including SNAP. Information maintained in ACES is relied upon by OFI for determining monthly SNAP benefits issued to client Electronic Benefit Transaction (EBT) cards. OFI relies on numerous data sources for identifying and providing client DOD information for input into ACES, including monthly data exchanges with the Maine Center for Disease Control & Prevention (MeCDC) Vital Records, which includes Social Security Administration data. Federal program regulations require OFI to act on client cases within 45 days of receipt of DOD information. This includes review and comparison of DOD information to ACES case file information, and suspension of program participation and related benefits as warranted. OFI policies for SNAP require deactivation of the client’s EBT card as well as expungement of authorized benefits from the EBT card. If activity occurred on the client’s EBT card subsequent to the DOD, the case must be reported as potential fraud and referred for investigation. OSA obtained DOD information from MeCDC Vital Records and compared it to clients who received SNAP benefits during fiscal year 2024. OSA identified 214 cases where SNAP benefits were issued more than 75 days following the client’s DOD; this benchmark was applied to denote the 45-day Federal program regulation related to monthly receipt of DOD information. OSA tested 43 of these SNAP cases and identified the following: • 16 single member household clients had EBT card purchase activity after DOD. Of these 16 clients: o 14 clients had transaction activity after DOD that occurred in fiscal year 2024, resulting in unallowable costs totaling $11,080. Additional issues were noted for six of the 14 clients, as follows: • Two clients were not identified as potential fraud in the ACES case file. As a result, they were not referred for investigation as required by OFI policies. • One client’s EBT card was not deactivated upon receipt of DOD information. • Two clients’ benefits were not expunged upon receipt of DOD information as required by OFI policies; benefits were only expunged by the system-automated process based on inactivity after 274 days. • One client’s case remained open 91 days after OFI was notified of the client’s DOD, resulting in three months of unauthorized SNAP benefit issuances. o two clients had transaction activity that occurred subsequent to fiscal year 2024. Of the two clients, one client was not identified as potential fraud in the ACES case file. As a result, they were not referred for investigation as required by OFI policies. • Eight clients with no EBT card purchase activity after DOD had additional issues noted, as follows: o For six clients, the EBT card was never deactivated; therefore, benefits remained open and available for use 83 to 112 days after DOD. o One client’s benefits were not expunged upon receipt of DOD information as required by OFI policies; benefits were only expunged by the system-automated process based on inactivity after 274 days. o One client’s EBT card was never deactivated and benefits were not expunged upon receipt of DOD information as required by OFI policies. OSA selected a non-statistical random sample. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. Of the 129,000 SNAP clients, 1,789 had a DOD in fiscal year 2024. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Benefits issued to deceased clients may result in unauthorized EBT card purchase activity. • Known questioned costs • Potential future questioned costs and disallowances • Noncompliance with Federal regulations Recommendation: We recommend that the Department enhance policies and procedures to ensure that DOD information is received, reviewed, and updated in ACES on a more frequent basis to prevent unauthorized SNAP benefit issuances and EBT card purchase activity. In addition, we recommend that the Department review all client cases noted in the Condition of this finding to ensure that: • ACES case file DOD information is accurate; • SNAP benefits are expunged and EBT cards are deactivated in accordance with existing policies; • cases are identified as potential fraud and referred for investigation as warranted; and • unallowable costs are identified and reported to Federal oversight agencies and required recoupment activities are pursued. Corrective Action Plan: See F-13 Management’s Response: The Department partially agrees with this finding. In most cases cited the Department took appropriate action within the 45 days required by federal regulation related to IEVS information or within the 10-12-10 standard required for community complaints depending on the source of the information. The Department recognizes that some actions were lacking or could have been taken more quickly. A dedicated MaineCare Program Integrity Team is now working on the IEVS reports related to deceased members and has detailed SOPs for death matches. Based on the data improvements, this finding may continue to a small degree in the SFY 2025 audit and should be cleaned up in the SFY 2026 audit. Contact: Michael E. Downs, Senior Program Manager, SNAP, DHHS, 207-592-4850 Auditor’s Concluding Remarks: The exceptions noted in the Condition were identified within a sample of SNAP cases where benefits were issued more than 75 days following the client’s DOD. The 75-day benchmark was applied to include considerations of the monthly (30 day) receipt and the Federal program regulation (45 day). These cases demonstrate that the Department did not take appropriate action as required by Federal regulations in all exceptions identified. The finding remains as stated. (State Number: 24-1108-03)
(2024-023) Title: Internal control over SNAP deceased client cases needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.551 $11,080 Likely Questioned Costs: Undeterminable; the Office of the State Auditor (OSA) tested a sample of cases where Supplemental Nutrition Assistance Program (SNAP) benefits were issued after the client’s date of death (DOD). Issuance of benefits to a deceased client does not necessarily result in unallowable program costs, as the issued benefits may not be expended; therefore, an error rate cannot be applied to the population and a projection of questioned costs cannot be reasonably estimated. Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 272.8 and .14 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. State agency action on information items about recipient households shall include review of information and comparison of it to case record information. State agencies must initiate and pursue actions on recipient households within 45 days of the receipt of the information items. States shall establish a system to verify and ensure that benefits are not issued to individuals who are deceased. Condition: The Office for Family Independence (OFI) manages the Automated Client Eligibility System (ACES) used to determine eligibility for Federal assistance programs, including SNAP. Information maintained in ACES is relied upon by OFI for determining monthly SNAP benefits issued to client Electronic Benefit Transaction (EBT) cards. OFI relies on numerous data sources for identifying and providing client DOD information for input into ACES, including monthly data exchanges with the Maine Center for Disease Control & Prevention (MeCDC) Vital Records, which includes Social Security Administration data. Federal program regulations require OFI to act on client cases within 45 days of receipt of DOD information. This includes review and comparison of DOD information to ACES case file information, and suspension of program participation and related benefits as warranted. OFI policies for SNAP require deactivation of the client’s EBT card as well as expungement of authorized benefits from the EBT card. If activity occurred on the client’s EBT card subsequent to the DOD, the case must be reported as potential fraud and referred for investigation. OSA obtained DOD information from MeCDC Vital Records and compared it to clients who received SNAP benefits during fiscal year 2024. OSA identified 214 cases where SNAP benefits were issued more than 75 days following the client’s DOD; this benchmark was applied to denote the 45-day Federal program regulation related to monthly receipt of DOD information. OSA tested 43 of these SNAP cases and identified the following: • 16 single member household clients had EBT card purchase activity after DOD. Of these 16 clients: o 14 clients had transaction activity after DOD that occurred in fiscal year 2024, resulting in unallowable costs totaling $11,080. Additional issues were noted for six of the 14 clients, as follows: • Two clients were not identified as potential fraud in the ACES case file. As a result, they were not referred for investigation as required by OFI policies. • One client’s EBT card was not deactivated upon receipt of DOD information. • Two clients’ benefits were not expunged upon receipt of DOD information as required by OFI policies; benefits were only expunged by the system-automated process based on inactivity after 274 days. • One client’s case remained open 91 days after OFI was notified of the client’s DOD, resulting in three months of unauthorized SNAP benefit issuances. o two clients had transaction activity that occurred subsequent to fiscal year 2024. Of the two clients, one client was not identified as potential fraud in the ACES case file. As a result, they were not referred for investigation as required by OFI policies. • Eight clients with no EBT card purchase activity after DOD had additional issues noted, as follows: o For six clients, the EBT card was never deactivated; therefore, benefits remained open and available for use 83 to 112 days after DOD. o One client’s benefits were not expunged upon receipt of DOD information as required by OFI policies; benefits were only expunged by the system-automated process based on inactivity after 274 days. o One client’s EBT card was never deactivated and benefits were not expunged upon receipt of DOD information as required by OFI policies. OSA selected a non-statistical random sample. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. Of the 129,000 SNAP clients, 1,789 had a DOD in fiscal year 2024. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • Benefits issued to deceased clients may result in unauthorized EBT card purchase activity. • Known questioned costs • Potential future questioned costs and disallowances • Noncompliance with Federal regulations Recommendation: We recommend that the Department enhance policies and procedures to ensure that DOD information is received, reviewed, and updated in ACES on a more frequent basis to prevent unauthorized SNAP benefit issuances and EBT card purchase activity. In addition, we recommend that the Department review all client cases noted in the Condition of this finding to ensure that: • ACES case file DOD information is accurate; • SNAP benefits are expunged and EBT cards are deactivated in accordance with existing policies; • cases are identified as potential fraud and referred for investigation as warranted; and • unallowable costs are identified and reported to Federal oversight agencies and required recoupment activities are pursued. Corrective Action Plan: See F-13 Management’s Response: The Department partially agrees with this finding. In most cases cited the Department took appropriate action within the 45 days required by federal regulation related to IEVS information or within the 10-12-10 standard required for community complaints depending on the source of the information. The Department recognizes that some actions were lacking or could have been taken more quickly. A dedicated MaineCare Program Integrity Team is now working on the IEVS reports related to deceased members and has detailed SOPs for death matches. Based on the data improvements, this finding may continue to a small degree in the SFY 2025 audit and should be cleaned up in the SFY 2026 audit. Contact: Michael E. Downs, Senior Program Manager, SNAP, DHHS, 207-592-4850 Auditor’s Concluding Remarks: The exceptions noted in the Condition were identified within a sample of SNAP cases where benefits were issued more than 75 days following the client’s DOD. The 75-day benchmark was applied to include considerations of the monthly (30 day) receipt and the Federal program regulation (45 day). These cases demonstrate that the Department did not take appropriate action as required by Federal regulations in all exceptions identified. The finding remains as stated. (State Number: 24-1108-03)
(2024-024) Title: Internal control over automated SNAP eligibility certification periods needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Special tests and provisions Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.551 $3,973 Likely Questioned Costs: Undeterminable; incorrectly suspending Supplemental Nutrition Assistance Program (SNAP) benefits may result in overpayments or underpayments to households. Since there are known overpayments and underpayments in our sample, a projection of questioned costs cannot be reasonably estimated. Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 272.10; 7 CFR 273.10 and .12 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. All State agencies must sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing and transmitting information concerning SNAP, which includes automatic cutoff of participation for households which have not been recertified at the end of their certification period. SNAP households must be assigned eligibility certification periods of at least six months unless the household is classified as exempt based on program regulations. The State agency must have at least one contact with each SNAP household every 12 months. Submission of periodic eligibility reports is required by non-exempt households. Non-exempt households that are certified for longer than six months must file a periodic report between four months and six months, as required by the State agency. In addition, the State agency must not require the submission of periodic reports by households certified for 12 months or less in which all adult members are elderly or have a disability and no earned income. Condition: SNAP is administered by the Office for Family Independence (OFI) and provides monthly benefits to eligible households to purchase nutritious foods. OFI is required by Federal program regulations to utilize an automated information system for SNAP. The information system must maintain all case file information necessary to properly process eligibility determinations and benefit computations. The Automated Client Eligibility System (ACES) is the information system used by OFI to automate SNAP operations. ACES relies on the maintenance of a complex framework of system rules to make eligibility determinations, including notification letters to clients when 6-month reports and 12-month redeterminations of eligibility are required. All SNAP households, except for elderly and disabled cases with no earned income, are required to submit 6-month reports. In addition, all SNAP households must undergo an annual redetermination of eligibility. Each household’s recertification requirements are indicated by date fields in the ACES case file. If a required report or redetermination is not completed by the date indicated in the applicable field, the case’s monthly SNAP benefit is automatically suspended by the system. The Office of the State Auditor (OSA) tested a sample of 20 cases automatically suspended for failure to complete a required review in fiscal year 2024 to verify the accuracy of automated SNAP operations utilizing ACES. In 14 of the 20 cases tested, OSA identified that ACES incorrectly suspended benefits, as follows: • One case was suspended four months after the 6-month reporting requirement, resulting in a known overpayment of $92. • One case was suspended one month after the annual redetermination requirement, resulting in a known overpayment of $535. • Six cases were underpaid SNAP benefits totaling $4,424 because of incorrect benefit suspensions, ranging from one to five months prior to the applicable 6-month reporting requirement. • Five cases were underpaid SNAP benefits totaling $4,206 because of incorrect benefit suspensions, ranging from five to ten months prior to the annual redetermination requirement. • One case was never required to submit 6-month reports or annual redeterminations since commencement of SNAP benefits in July 2022. This resulted in overpayments for the entirety of fiscal year 2024 totaling $3,346. The Department identified the overpayment in July 2024 but has not recouped it yet, thus OSA is questioning costs totaling $3,346. OSA selected a non-statistical random sample. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. 213 clients were automatically suspended by ACES during fiscal year 2024 due to recertification or redetermination requirements. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight • Automated SNAP eligibility system recertification and suspension criteria was not configured in accordance with Federal regulations. Effect: • Known questioned costs • Potential future questioned costs and disallowances • Noncompliance with Federal regulations • Benefits may be incorrectly suspended, resulting in households being underpaid or overpaid. Recommendation: We recommend that the Department enhance policies and procedures to ensure that automated SNAP eligibility certification periods and related ACES case file fields are properly configured to process benefits in accordance with Federal regulations. In addition, we recommend that the Department identify underpayments and/or overpayments resulting from recertification period errors and take action as warranted. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with the factual conclusions and calculations. The Department believes the necessary corrective action has been taken and will be reflected in the SFY25 audit. Contact: Ian Yaffe, Director, Office for Family Independence, DHHS, 207-592-1481 (State Number: 24-1108-02)
(2024-024) Title: Internal control over automated SNAP eligibility certification periods needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Special tests and provisions Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.551 $3,973 Likely Questioned Costs: Undeterminable; incorrectly suspending Supplemental Nutrition Assistance Program (SNAP) benefits may result in overpayments or underpayments to households. Since there are known overpayments and underpayments in our sample, a projection of questioned costs cannot be reasonably estimated. Criteria: 2 CFR 200.303; 2 CFR 200.403; 7 CFR 272.10; 7 CFR 273.10 and .12 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. To be allowable under Federal awards, costs must be necessary and reasonable for the performance of the Federal award and be adequately documented. All State agencies must sufficiently automate their SNAP operations and computerize their systems for obtaining, maintaining, utilizing and transmitting information concerning SNAP, which includes automatic cutoff of participation for households which have not been recertified at the end of their certification period. SNAP households must be assigned eligibility certification periods of at least six months unless the household is classified as exempt based on program regulations. The State agency must have at least one contact with each SNAP household every 12 months. Submission of periodic eligibility reports is required by non-exempt households. Non-exempt households that are certified for longer than six months must file a periodic report between four months and six months, as required by the State agency. In addition, the State agency must not require the submission of periodic reports by households certified for 12 months or less in which all adult members are elderly or have a disability and no earned income. Condition: SNAP is administered by the Office for Family Independence (OFI) and provides monthly benefits to eligible households to purchase nutritious foods. OFI is required by Federal program regulations to utilize an automated information system for SNAP. The information system must maintain all case file information necessary to properly process eligibility determinations and benefit computations. The Automated Client Eligibility System (ACES) is the information system used by OFI to automate SNAP operations. ACES relies on the maintenance of a complex framework of system rules to make eligibility determinations, including notification letters to clients when 6-month reports and 12-month redeterminations of eligibility are required. All SNAP households, except for elderly and disabled cases with no earned income, are required to submit 6-month reports. In addition, all SNAP households must undergo an annual redetermination of eligibility. Each household’s recertification requirements are indicated by date fields in the ACES case file. If a required report or redetermination is not completed by the date indicated in the applicable field, the case’s monthly SNAP benefit is automatically suspended by the system. The Office of the State Auditor (OSA) tested a sample of 20 cases automatically suspended for failure to complete a required review in fiscal year 2024 to verify the accuracy of automated SNAP operations utilizing ACES. In 14 of the 20 cases tested, OSA identified that ACES incorrectly suspended benefits, as follows: • One case was suspended four months after the 6-month reporting requirement, resulting in a known overpayment of $92. • One case was suspended one month after the annual redetermination requirement, resulting in a known overpayment of $535. • Six cases were underpaid SNAP benefits totaling $4,424 because of incorrect benefit suspensions, ranging from one to five months prior to the applicable 6-month reporting requirement. • Five cases were underpaid SNAP benefits totaling $4,206 because of incorrect benefit suspensions, ranging from five to ten months prior to the annual redetermination requirement. • One case was never required to submit 6-month reports or annual redeterminations since commencement of SNAP benefits in July 2022. This resulted in overpayments for the entirety of fiscal year 2024 totaling $3,346. The Department identified the overpayment in July 2024 but has not recouped it yet, thus OSA is questioning costs totaling $3,346. OSA selected a non-statistical random sample. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. 213 clients were automatically suspended by ACES during fiscal year 2024 due to recertification or redetermination requirements. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight • Automated SNAP eligibility system recertification and suspension criteria was not configured in accordance with Federal regulations. Effect: • Known questioned costs • Potential future questioned costs and disallowances • Noncompliance with Federal regulations • Benefits may be incorrectly suspended, resulting in households being underpaid or overpaid. Recommendation: We recommend that the Department enhance policies and procedures to ensure that automated SNAP eligibility certification periods and related ACES case file fields are properly configured to process benefits in accordance with Federal regulations. In addition, we recommend that the Department identify underpayments and/or overpayments resulting from recertification period errors and take action as warranted. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with the factual conclusions and calculations. The Department believes the necessary corrective action has been taken and will be reflected in the SFY25 audit. Contact: Ian Yaffe, Director, Office for Family Independence, DHHS, 207-592-1481 (State Number: 24-1108-02)
(2024-025) Title: Internal control over SNAP EBT card security needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Special tests and provisions Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 7 CFR 274.5 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The State is required to provide the following minimum security and control procedures for EBT cards: secure storage; access limited to authorized personnel; inventory control records; and a periodic review and validation of inventory controls and records by parties not otherwise involved in maintaining control records. Issuance, inventory, reconciliation, and other accountability records must be maintained for a period of three years. Condition: The Supplemental Nutrition Assistance Program (SNAP) provides monthly benefits to eligible households to purchase nutritious foods. The program utilizes Electronic Benefit Transfer (EBT) cards as the mechanism to provide benefits. SNAP benefit information is transmitted to the Electronic Payment Processing and Information Control (EPPIC) system used for EBT. An EBT card is issued using the EPPIC system and mailed to the client’s mailing address. EBT cards that are undeliverable are returned to the regional Department of Health and Human Services office for processing. Upon receipt of a returned EBT card, the Automated Client Eligibility System (ACES) is used to verify a client’s personal information, determine what action to take based on case file information, and document the action through electronic case notes. The Department has assigned responsibility for processing returned EBT cards to one employee. This process includes receipt of returned cards, maintenance of inventory control records including supporting documentation in ACES and EPPIC, and destruction or retransmission of the card. Proper segregation of duties does not exist within the current process, as recordkeeping, custody of EBT cards, and authorization of processing activity should be assigned to different employees. In addition, the State is required to maintain accurate and complete inventory records for returned EBT cards. Returned cards are either destroyed or retransmitted, and are tracked using spreadsheets and related documentation through client case notes in ACES and EBT card activity in the EPPIC system. The Office of the State Auditor (OSA) tested a sample of 60 returned EBT cards to verify the accuracy and completeness of the activity recorded on the inventory tracking spreadsheets, and identified: • one returned EBT card where processing activity was not documented in a case note; • one returned EBT card where the disabled card status was not applied in the EPPIC system until nine months after it was destroyed; • one returned EBT card where the action documented in ACES did not match the action taken in the EPPIC system; and • two returned EBT cards were recorded on the tracking spreadsheet as retransmitted to an updated address, but no documentation was maintained in ACES to support that a new address was obtained. OSA selected a non-statistical random sample. A data analysis and cross-match of the inventory tracking spreadsheets identified that one returned EBT card was processed utilizing client information which erroneously included two unrelated client names tied to the same client identification number. Quarterly, management monitors the inventory tracking spreadsheets by selecting a sample of returned EBT cards for review; however, this oversight procedure does not detect and correct processing errors on a timely basis. Furthermore, the State is required to maintain secure storage of, and limited access to, EBT cards. The current process does not require proper physical security over returned EBT cards as the returned cards are placed in an open mailbox during processing. While the mailbox is in a secure area of the facility, any employee working within the regional office has access to this mailbox. Existing policies and procedures in place do not provide adequate security over returned EBT cards, including proper segregation of duties, maintenance of accurate and complete inventory control records, and appropriate physical security controls over EBT cards. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. The Department processed 2,469 returned EBT cards; 853 were recorded as retransmitted and 1,616 were recorded as destroyed. Cause: • Lack of segregation of duties • Lack of adequate policies and procedures relating to the security and oversight of returned EBT cards Effect: • Potential unauthorized use of EBT cards, which may lead to unallowable costs • Noncompliance with Federal regulations Recommendation: We recommend that the Department enhance policies and procedures to require adequate security and oversight of returned EBT cards, including proper segregation of duties within the process, maintenance of accurate and complete inventory control records, and increased physical security controls. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with this finding. During the audit period, the process for handling returned EBT cards was assigned to one (1) individual. In response to a prior year finding, the Department implemented corrective actions effective July 1, 2024. The current process has the duties separated into 3 roles. First, an Accounting Associate I receives the returned EBT cards at OFI’s Central Office. The Accounting Associate scans the card and envelope to an Office Associate II in a separate office. The Office Associate II enters the cards into a spreadsheet (returned card log) and researches the cases to determine what to do with the card. The Office Associate records the necessary information into the returned card log and makes an ACES case note to reflect any action taken. Then a response is sent back to the Accounting Associate to advise which EBT cards should be shredded and which cards should be resent. Finally, the EBT Manager conducts a periodic review of the returned card log to ensure the cards are being handled appropriately. The Department will also be hiring a new Office Associate II (Supervisor) to assist in this process. Because these procedures were implemented effective 7/1/2024, they were not captured during this single audit. No corrective action is required due to our current procedures meeting state and Federal card security requirements. Contact: Ian Yaffe, Director, Office for Family Independence, DHHS, 207-592-1481 (State Number: 24-1108-01)
(2024-025) Title: Internal control over SNAP EBT card security needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Office for Family Independence Federal Agency: U.S. Department of Agriculture Assistance Listing Title: SNAP Cluster Assistance Listing Number: 10.551, 10.561 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Special tests and provisions Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 7 CFR 274.5 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The State is required to provide the following minimum security and control procedures for EBT cards: secure storage; access limited to authorized personnel; inventory control records; and a periodic review and validation of inventory controls and records by parties not otherwise involved in maintaining control records. Issuance, inventory, reconciliation, and other accountability records must be maintained for a period of three years. Condition: The Supplemental Nutrition Assistance Program (SNAP) provides monthly benefits to eligible households to purchase nutritious foods. The program utilizes Electronic Benefit Transfer (EBT) cards as the mechanism to provide benefits. SNAP benefit information is transmitted to the Electronic Payment Processing and Information Control (EPPIC) system used for EBT. An EBT card is issued using the EPPIC system and mailed to the client’s mailing address. EBT cards that are undeliverable are returned to the regional Department of Health and Human Services office for processing. Upon receipt of a returned EBT card, the Automated Client Eligibility System (ACES) is used to verify a client’s personal information, determine what action to take based on case file information, and document the action through electronic case notes. The Department has assigned responsibility for processing returned EBT cards to one employee. This process includes receipt of returned cards, maintenance of inventory control records including supporting documentation in ACES and EPPIC, and destruction or retransmission of the card. Proper segregation of duties does not exist within the current process, as recordkeeping, custody of EBT cards, and authorization of processing activity should be assigned to different employees. In addition, the State is required to maintain accurate and complete inventory records for returned EBT cards. Returned cards are either destroyed or retransmitted, and are tracked using spreadsheets and related documentation through client case notes in ACES and EBT card activity in the EPPIC system. The Office of the State Auditor (OSA) tested a sample of 60 returned EBT cards to verify the accuracy and completeness of the activity recorded on the inventory tracking spreadsheets, and identified: • one returned EBT card where processing activity was not documented in a case note; • one returned EBT card where the disabled card status was not applied in the EPPIC system until nine months after it was destroyed; • one returned EBT card where the action documented in ACES did not match the action taken in the EPPIC system; and • two returned EBT cards were recorded on the tracking spreadsheet as retransmitted to an updated address, but no documentation was maintained in ACES to support that a new address was obtained. OSA selected a non-statistical random sample. A data analysis and cross-match of the inventory tracking spreadsheets identified that one returned EBT card was processed utilizing client information which erroneously included two unrelated client names tied to the same client identification number. Quarterly, management monitors the inventory tracking spreadsheets by selecting a sample of returned EBT cards for review; however, this oversight procedure does not detect and correct processing errors on a timely basis. Furthermore, the State is required to maintain secure storage of, and limited access to, EBT cards. The current process does not require proper physical security over returned EBT cards as the returned cards are placed in an open mailbox during processing. While the mailbox is in a secure area of the facility, any employee working within the regional office has access to this mailbox. Existing policies and procedures in place do not provide adequate security over returned EBT cards, including proper segregation of duties, maintenance of accurate and complete inventory control records, and appropriate physical security controls over EBT cards. Context: In fiscal year 2024, the State provided approximately 129,000 SNAP clients with $371.4 million in Federal benefits. The Department processed 2,469 returned EBT cards; 853 were recorded as retransmitted and 1,616 were recorded as destroyed. Cause: • Lack of segregation of duties • Lack of adequate policies and procedures relating to the security and oversight of returned EBT cards Effect: • Potential unauthorized use of EBT cards, which may lead to unallowable costs • Noncompliance with Federal regulations Recommendation: We recommend that the Department enhance policies and procedures to require adequate security and oversight of returned EBT cards, including proper segregation of duties within the process, maintenance of accurate and complete inventory control records, and increased physical security controls. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with this finding. During the audit period, the process for handling returned EBT cards was assigned to one (1) individual. In response to a prior year finding, the Department implemented corrective actions effective July 1, 2024. The current process has the duties separated into 3 roles. First, an Accounting Associate I receives the returned EBT cards at OFI’s Central Office. The Accounting Associate scans the card and envelope to an Office Associate II in a separate office. The Office Associate II enters the cards into a spreadsheet (returned card log) and researches the cases to determine what to do with the card. The Office Associate records the necessary information into the returned card log and makes an ACES case note to reflect any action taken. Then a response is sent back to the Accounting Associate to advise which EBT cards should be shredded and which cards should be resent. Finally, the EBT Manager conducts a periodic review of the returned card log to ensure the cards are being handled appropriately. The Department will also be hiring a new Office Associate II (Supervisor) to assist in this process. Because these procedures were implemented effective 7/1/2024, they were not captured during this single audit. No corrective action is required due to our current procedures meeting state and Federal card security requirements. Contact: Ian Yaffe, Director, Office for Family Independence, DHHS, 207-592-1481 (State Number: 24-1108-01)
(2024-026) Title: Internal control over DHHS special reporting needs improvement Prior Year Findings: None State Department: Health and Human Services State Bureau: Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: SNAP Cluster Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Opioid STR Assistance Listing Number: 10.551, 10.561; 10.557; 93.788 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 170 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of $30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: When an amount exceeding the first-tier subaward threshold is awarded to a subrecipient, the Department must collect and enter data into FSRS. The Office of the State Auditor (OSA) tested nine first-tier subawards totaling $1,515,620 that exceeded the first-tier subaward threshold. Federal regulations require the following information for identified noncompliance to be included in FFATA findings: • three WIC subawards totaling approximately $746,000 were not reported and thus, not reported timely; • one Supplemental Nutrition Assistance Program (SNAP) subaward totaling approximately $95,000 was not reported and thus, not reported timely; • one Opioid State Targeted Response (STR) subaward totaling approximately $68,000 was not reported and thus, not reported timely; • no subaward amounts were reported incorrectly; and • no subawards reported incorrect key data elements. The unreported Opioid STR subaward was a contract modification that included multiple sources of grant funds including the Temporary Assistance for Needy Families program. Upon OSA’s inquiry, the Department stated that the Opioid STR subaward was not reported because the Federal Award Identification Number (FAIN) was missing. The Department provided a verification workbook that serves as a working log for subawards that may require FFATA reporting but have not been reported in FSRS for various reasons. Review of the log revealed additional grant programs, including WIC and SNAP, with unreported subawards due to missing FAINs. OSA was able to locate the missing FAINs by contacting the grant program administrators listed on the encumbered contract. OSA selected a non-statistical random sample. Context: During fiscal year 2024, the Department disbursed: • $5.9 million to subrecipients from WIC grant funds of $22.8 million. • $5.2 million to subrecipients from SNAP administrative grant funds of $19.1 million. • $4.9 million to subrecipients from Opioid STR grant funds of $5.9 million. Cause: • Lack of supervisory oversight • Lack of adequate policies and procedures Effect: • Noncompliance with Federal regulations • Accurate first-tier subaward information for the WIC, SNAP, and Opioid STR programs was not reported to the Federal government. This information may be used for programmatic, policy or statistical purposes. Recommendation: We recommend that the Department enhance policies and oversight procedures to ensure that all first-tier subawards are reported accurately, timely, and in accordance with Federal regulations. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with this finding. The Division of Contract Management has developed and will implement a corrective action plan to address the issues identified. Contact: Jeanne Garza, Deputy Director, Division of Contract Management, DHHS, 207-287-1848 (State Number: 24-1100-02)
(2024-026) Title: Internal control over DHHS special reporting needs improvement Prior Year Findings: None State Department: Health and Human Services State Bureau: Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: SNAP Cluster Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Opioid STR Assistance Listing Number: 10.551, 10.561; 10.557; 93.788 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 170 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of $30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: When an amount exceeding the first-tier subaward threshold is awarded to a subrecipient, the Department must collect and enter data into FSRS. The Office of the State Auditor (OSA) tested nine first-tier subawards totaling $1,515,620 that exceeded the first-tier subaward threshold. Federal regulations require the following information for identified noncompliance to be included in FFATA findings: • three WIC subawards totaling approximately $746,000 were not reported and thus, not reported timely; • one Supplemental Nutrition Assistance Program (SNAP) subaward totaling approximately $95,000 was not reported and thus, not reported timely; • one Opioid State Targeted Response (STR) subaward totaling approximately $68,000 was not reported and thus, not reported timely; • no subaward amounts were reported incorrectly; and • no subawards reported incorrect key data elements. The unreported Opioid STR subaward was a contract modification that included multiple sources of grant funds including the Temporary Assistance for Needy Families program. Upon OSA’s inquiry, the Department stated that the Opioid STR subaward was not reported because the Federal Award Identification Number (FAIN) was missing. The Department provided a verification workbook that serves as a working log for subawards that may require FFATA reporting but have not been reported in FSRS for various reasons. Review of the log revealed additional grant programs, including WIC and SNAP, with unreported subawards due to missing FAINs. OSA was able to locate the missing FAINs by contacting the grant program administrators listed on the encumbered contract. OSA selected a non-statistical random sample. Context: During fiscal year 2024, the Department disbursed: • $5.9 million to subrecipients from WIC grant funds of $22.8 million. • $5.2 million to subrecipients from SNAP administrative grant funds of $19.1 million. • $4.9 million to subrecipients from Opioid STR grant funds of $5.9 million. Cause: • Lack of supervisory oversight • Lack of adequate policies and procedures Effect: • Noncompliance with Federal regulations • Accurate first-tier subaward information for the WIC, SNAP, and Opioid STR programs was not reported to the Federal government. This information may be used for programmatic, policy or statistical purposes. Recommendation: We recommend that the Department enhance policies and oversight procedures to ensure that all first-tier subawards are reported accurately, timely, and in accordance with Federal regulations. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with this finding. The Division of Contract Management has developed and will implement a corrective action plan to address the issues identified. Contact: Jeanne Garza, Deputy Director, Division of Contract Management, DHHS, 207-287-1848 (State Number: 24-1100-02)
(2024-026) Title: Internal control over DHHS special reporting needs improvement Prior Year Findings: None State Department: Health and Human Services State Bureau: Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: SNAP Cluster Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Opioid STR Assistance Listing Number: 10.551, 10.561; 10.557; 93.788 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 170 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of $30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: When an amount exceeding the first-tier subaward threshold is awarded to a subrecipient, the Department must collect and enter data into FSRS. The Office of the State Auditor (OSA) tested nine first-tier subawards totaling $1,515,620 that exceeded the first-tier subaward threshold. Federal regulations require the following information for identified noncompliance to be included in FFATA findings: • three WIC subawards totaling approximately $746,000 were not reported and thus, not reported timely; • one Supplemental Nutrition Assistance Program (SNAP) subaward totaling approximately $95,000 was not reported and thus, not reported timely; • one Opioid State Targeted Response (STR) subaward totaling approximately $68,000 was not reported and thus, not reported timely; • no subaward amounts were reported incorrectly; and • no subawards reported incorrect key data elements. The unreported Opioid STR subaward was a contract modification that included multiple sources of grant funds including the Temporary Assistance for Needy Families program. Upon OSA’s inquiry, the Department stated that the Opioid STR subaward was not reported because the Federal Award Identification Number (FAIN) was missing. The Department provided a verification workbook that serves as a working log for subawards that may require FFATA reporting but have not been reported in FSRS for various reasons. Review of the log revealed additional grant programs, including WIC and SNAP, with unreported subawards due to missing FAINs. OSA was able to locate the missing FAINs by contacting the grant program administrators listed on the encumbered contract. OSA selected a non-statistical random sample. Context: During fiscal year 2024, the Department disbursed: • $5.9 million to subrecipients from WIC grant funds of $22.8 million. • $5.2 million to subrecipients from SNAP administrative grant funds of $19.1 million. • $4.9 million to subrecipients from Opioid STR grant funds of $5.9 million. Cause: • Lack of supervisory oversight • Lack of adequate policies and procedures Effect: • Noncompliance with Federal regulations • Accurate first-tier subaward information for the WIC, SNAP, and Opioid STR programs was not reported to the Federal government. This information may be used for programmatic, policy or statistical purposes. Recommendation: We recommend that the Department enhance policies and oversight procedures to ensure that all first-tier subawards are reported accurately, timely, and in accordance with Federal regulations. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with this finding. The Division of Contract Management has developed and will implement a corrective action plan to address the issues identified. Contact: Jeanne Garza, Deputy Director, Division of Contract Management, DHHS, 207-287-1848 (State Number: 24-1100-02)
(2024-026) Title: Internal control over DHHS special reporting needs improvement Prior Year Findings: None State Department: Health and Human Services State Bureau: Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: SNAP Cluster Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Opioid STR Assistance Listing Number: 10.551, 10.561; 10.557; 93.788 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 170 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of $30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: When an amount exceeding the first-tier subaward threshold is awarded to a subrecipient, the Department must collect and enter data into FSRS. The Office of the State Auditor (OSA) tested nine first-tier subawards totaling $1,515,620 that exceeded the first-tier subaward threshold. Federal regulations require the following information for identified noncompliance to be included in FFATA findings: • three WIC subawards totaling approximately $746,000 were not reported and thus, not reported timely; • one Supplemental Nutrition Assistance Program (SNAP) subaward totaling approximately $95,000 was not reported and thus, not reported timely; • one Opioid State Targeted Response (STR) subaward totaling approximately $68,000 was not reported and thus, not reported timely; • no subaward amounts were reported incorrectly; and • no subawards reported incorrect key data elements. The unreported Opioid STR subaward was a contract modification that included multiple sources of grant funds including the Temporary Assistance for Needy Families program. Upon OSA’s inquiry, the Department stated that the Opioid STR subaward was not reported because the Federal Award Identification Number (FAIN) was missing. The Department provided a verification workbook that serves as a working log for subawards that may require FFATA reporting but have not been reported in FSRS for various reasons. Review of the log revealed additional grant programs, including WIC and SNAP, with unreported subawards due to missing FAINs. OSA was able to locate the missing FAINs by contacting the grant program administrators listed on the encumbered contract. OSA selected a non-statistical random sample. Context: During fiscal year 2024, the Department disbursed: • $5.9 million to subrecipients from WIC grant funds of $22.8 million. • $5.2 million to subrecipients from SNAP administrative grant funds of $19.1 million. • $4.9 million to subrecipients from Opioid STR grant funds of $5.9 million. Cause: • Lack of supervisory oversight • Lack of adequate policies and procedures Effect: • Noncompliance with Federal regulations • Accurate first-tier subaward information for the WIC, SNAP, and Opioid STR programs was not reported to the Federal government. This information may be used for programmatic, policy or statistical purposes. Recommendation: We recommend that the Department enhance policies and oversight procedures to ensure that all first-tier subawards are reported accurately, timely, and in accordance with Federal regulations. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with this finding. The Division of Contract Management has developed and will implement a corrective action plan to address the issues identified. Contact: Jeanne Garza, Deputy Director, Division of Contract Management, DHHS, 207-287-1848 (State Number: 24-1100-02)
(2024-026) Title: Internal control over DHHS special reporting needs improvement Prior Year Findings: None State Department: Health and Human Services State Bureau: Division of Contract Management Federal Agency: U.S. Department of Agriculture U.S. Department of Health and Human Services Assistance Listing Title: SNAP Cluster Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Opioid STR Assistance Listing Number: 10.551, 10.561; 10.557; 93.788 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Reporting Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 170 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Agencies must report each subaward that equals or exceeds the first-tier subaward threshold of $30,000 in Federal funds in the public-facing Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System (FSRS). Condition: When an amount exceeding the first-tier subaward threshold is awarded to a subrecipient, the Department must collect and enter data into FSRS. The Office of the State Auditor (OSA) tested nine first-tier subawards totaling $1,515,620 that exceeded the first-tier subaward threshold. Federal regulations require the following information for identified noncompliance to be included in FFATA findings: • three WIC subawards totaling approximately $746,000 were not reported and thus, not reported timely; • one Supplemental Nutrition Assistance Program (SNAP) subaward totaling approximately $95,000 was not reported and thus, not reported timely; • one Opioid State Targeted Response (STR) subaward totaling approximately $68,000 was not reported and thus, not reported timely; • no subaward amounts were reported incorrectly; and • no subawards reported incorrect key data elements. The unreported Opioid STR subaward was a contract modification that included multiple sources of grant funds including the Temporary Assistance for Needy Families program. Upon OSA’s inquiry, the Department stated that the Opioid STR subaward was not reported because the Federal Award Identification Number (FAIN) was missing. The Department provided a verification workbook that serves as a working log for subawards that may require FFATA reporting but have not been reported in FSRS for various reasons. Review of the log revealed additional grant programs, including WIC and SNAP, with unreported subawards due to missing FAINs. OSA was able to locate the missing FAINs by contacting the grant program administrators listed on the encumbered contract. OSA selected a non-statistical random sample. Context: During fiscal year 2024, the Department disbursed: • $5.9 million to subrecipients from WIC grant funds of $22.8 million. • $5.2 million to subrecipients from SNAP administrative grant funds of $19.1 million. • $4.9 million to subrecipients from Opioid STR grant funds of $5.9 million. Cause: • Lack of supervisory oversight • Lack of adequate policies and procedures Effect: • Noncompliance with Federal regulations • Accurate first-tier subaward information for the WIC, SNAP, and Opioid STR programs was not reported to the Federal government. This information may be used for programmatic, policy or statistical purposes. Recommendation: We recommend that the Department enhance policies and oversight procedures to ensure that all first-tier subawards are reported accurately, timely, and in accordance with Federal regulations. Corrective Action Plan: See F-14 Management’s Response: The Department agrees with this finding. The Division of Contract Management has developed and will implement a corrective action plan to address the issues identified. Contact: Jeanne Garza, Deputy Director, Division of Contract Management, DHHS, 207-287-1848 (State Number: 24-1100-02)
(2024-030) Title: Internal control over CNC eligibility needs improvement Prior Year Findings: None State Department: Education State Bureau: Child Nutrition Services Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.559 $628,924 Likely Questioned Costs: Undeterminable; there is insufficient information on the application to identify programs that may be operating under an incorrect classification. Criteria: 2 CFR 200.303; 7 CFR 210.7 and .9; 7 CFR 225.6, .14, and .16; 7 CFR 245.12 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. 7 CFR 210 outlines the application requirements for participation in the National School Lunch Program (NSLP), and specifies that applications shall provide the State agency with sufficient information to determine eligibility. 7 CFR 225 requirements include: • the type of information that must be required in sponsor applications for participation; • sites that serve an area in which poor economic conditions exist or is approved for reimbursement only for meals served free to enrolled children who meet the program's income standards; • the proposed site is not or will not be served in whole or in part by another site; • State agency requirements related to the approval of applications and determinations of eligibility; and • the process and requirements for claims for reimbursement (CFRs). 7 CFR 245 describes the action taken by State agencies related to the eligibility determination of individuals and special eligibility determinations of schools including Provision II and Community Eligible Provision (CEP) schools. These regulations outline how the School Food Authority (SFA) and State agency should collect and report eligibility information in the schools, and how that information should be used in establishing rates and percentages in CFRs. Condition: The Child Nutrition Cluster (CNC) includes the School Breakfast Program, NSLP, Special Milk Program for Children, Summer Food Service Program (SFSP) and the Fresh Fruit and Vegetable Program. The objectives of the programs are to provide nutritious meals to eligible children in schools, residential childcare institutions, and summer food programs; to foster healthy eating habits by providing fresh fruits and vegetables to children attending elementary schools; and to encourage the consumption of nutritious agriculture commodities. The Department of Education (DOE) is responsible for the administration of child nutrition programs for the State. DOE provides benefits to each SFA or sponsor on a reimbursement basis. SFAs and sponsors must submit applications for participation in CNC programs and DOE is required to review every application and site information sheet to ensure that only eligible SFAs or sponsors participate in the programs. The Office of the State Auditor (OSA) tested 48 applications and found instances that did not align with program regulations for NSLP and SFSP, as follows: National School Lunch Program Applications to participate in child nutrition programs must include attestations and written agreement to the regulations set forth in 7 CFR 210 and 7 CFR 245. Agreements must be signed and returned to Child Nutrition Services (CNS) prior to meal service and the submission of a CFR by the SFA. OSA tested 32 applications from SFAs and sponsors for participation in NSLP and identified six applications that were not complete or were approved prior to participation in the program, as follows: • Three applications were approved for participation with missing information, including: o one application missing an agreement for participation in CEP; o one application not indicating the year of operation; and o one application missing the signature of the SFA superintendent. • Two applications were submitted after participation in the program had begun. • One application was missing the meal pattern agreement attestation that made them eligible for the eight-cent performance-based reimbursement for every lunch served and was also submitted after participation in the program had begun. OSA selected a non-statistical random sample. Summer Food Service Program While SFAs may operate SFSP, residential and non-residential day camps, units of local, municipal, county or State governments, and private nonprofit organizations may also participate in the program; these providers are called sponsors. Sponsors must submit a written application to CNS by June 15 to participate in the program. Sponsors operate individual sites, and sponsor applications must include site sheets for each site. OSA tested 16 applications from sponsors for participation in SFSP and found: • four applications were revised and the revisions were erroneously applied to prior months, resulting in questioned costs totaling $1,767 for meals served prior to approved revisions; and • eleven applications, including two with more than one error, that were approved with sites that did not meet the eligibility criteria, as follows: o Four sponsors had sites where CNS incorrectly categorized non-residential day camps as open sites, which allowed the site to use the area eligibility determination instead of using individual eligibility determinations, resulting in questioned costs totaling $68,342 for meals served without eligibility information provided. o Two sponsors of camps did not provide the number of eligible children for each session at their sites prior to submitting a CFR, resulting in questioned costs totaling $63,493 for meals served without eligibility information provided. o Three sponsors had four sites that used incorrect school or census data to demonstrate eligibility, resulting in one site that was ineligible for participation, and questioned costs totaling $33,682 for the operation of an ineligible site. o One application was approved with a breakfast time of 11:30 a.m.; there was no documentation to support that this meal was served near the site’s opening time as required by regulations, resulting in questioned costs totaling $8,635 for meals that do meet meal time requirements. o Three applications were approved for non-congregate sites that did not include procedures to ensure duplicate meals would not be distributed. One sponsor had seven open sites with overlapping meal times within a quarter-mile radius. OSA selected a non-statistical random sample. In addition, OSA performed analytical procedures over SFSP site classifications and found: • 58 sites from 32 sponsors did not apply eligibility criteria for camp participation, as follows: o 29 sites were classified as open sites or closed enrolled sites when additional information on the application or publicly available information indicated that the program met the definition of camps provided at 7 CFR 225; these sites used area eligibility to claim reimbursement for all meals served instead of only the meals served to eligible children, resulting in questioned costs totaling $208,142. o 9 sites indicated they were camps; however, they were classified as open sites or closed enrolled sites that used area eligibility to claim reimbursement for all meals served instead of only the meals served to eligible children, resulting in questioned costs totaling $100,379. o 13 sites indicated they were camps; however, their applications were not revised to include actual eligibility counts for each session prior to submission of CFRs, resulting in questioned costs totaling $82,567. o 7 sites described camp activities in their description of operations, but classified themselves as open sites or closed enrolled sites that used area eligibility to claim reimbursement for all meals served instead of only the meals served to eligible campers, resulting in questioned costs totaling $48,224. • 16 sponsors had site revisions approved by CNS that added operating days, increased capacities, changed meal types, added meals, or added non-congregate operations to a prior month. CNS permitted sponsors to include those revisions in the prior month’s CFR which were not in accordance with the agreement in place at the time of service, resulting in questioned costs totaling $13,693. Context: CNS processed $55.8 million in CFRs for NSLP, and $2.8 million in CFRs for SFSP in fiscal year 2024. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • CNC participation by ineligible SFAs or sponsors • Known questioned costs • Potential future questioned costs and disallowances • Noncompliance with Federal regulations Recommendation: We recommend that CNS revise policies and procedures to ensure: • SFSP site information sheet revisions prohibit the sponsor from using the revised information in a claim for a prior month; • site classifications appropriately identify camps, consistent with Federal regulations; and • site information sheets contain non-congregate plans that include required information. Additionally, we recommend that CNS enhance oversight to ensure: • all required documents for applications are complete and signed prior to meal service; • session-specific eligibility information is available on the site information sheets for camps; and • the eligibility of the locations of non-congregate sites is properly supported. Corrective Action Plan: See F-15 Management’s Response: The Department agrees with this finding. Procedures for “Application Approvals” will be delineated regarding application and claim revisions, Site classification, non-congregate plan requirements, Eligibility criteria and back up documentation, and all requirement documents will be adequately reviewed. Contact: Jane McLucas, Director of Child Nutrition, DOE, 207-624-6880 (State Number: 24-1203-05)
(2024-030) Title: Internal control over CNC eligibility needs improvement Prior Year Findings: None State Department: Education State Bureau: Child Nutrition Services Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Allowable costs/cost principles Eligibility Type of Finding: Material weakness Material noncompliance Questioned costs Known Questioned Costs: ALN 10.559 $628,924 Likely Questioned Costs: Undeterminable; there is insufficient information on the application to identify programs that may be operating under an incorrect classification. Criteria: 2 CFR 200.303; 7 CFR 210.7 and .9; 7 CFR 225.6, .14, and .16; 7 CFR 245.12 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. 7 CFR 210 outlines the application requirements for participation in the National School Lunch Program (NSLP), and specifies that applications shall provide the State agency with sufficient information to determine eligibility. 7 CFR 225 requirements include: • the type of information that must be required in sponsor applications for participation; • sites that serve an area in which poor economic conditions exist or is approved for reimbursement only for meals served free to enrolled children who meet the program's income standards; • the proposed site is not or will not be served in whole or in part by another site; • State agency requirements related to the approval of applications and determinations of eligibility; and • the process and requirements for claims for reimbursement (CFRs). 7 CFR 245 describes the action taken by State agencies related to the eligibility determination of individuals and special eligibility determinations of schools including Provision II and Community Eligible Provision (CEP) schools. These regulations outline how the School Food Authority (SFA) and State agency should collect and report eligibility information in the schools, and how that information should be used in establishing rates and percentages in CFRs. Condition: The Child Nutrition Cluster (CNC) includes the School Breakfast Program, NSLP, Special Milk Program for Children, Summer Food Service Program (SFSP) and the Fresh Fruit and Vegetable Program. The objectives of the programs are to provide nutritious meals to eligible children in schools, residential childcare institutions, and summer food programs; to foster healthy eating habits by providing fresh fruits and vegetables to children attending elementary schools; and to encourage the consumption of nutritious agriculture commodities. The Department of Education (DOE) is responsible for the administration of child nutrition programs for the State. DOE provides benefits to each SFA or sponsor on a reimbursement basis. SFAs and sponsors must submit applications for participation in CNC programs and DOE is required to review every application and site information sheet to ensure that only eligible SFAs or sponsors participate in the programs. The Office of the State Auditor (OSA) tested 48 applications and found instances that did not align with program regulations for NSLP and SFSP, as follows: National School Lunch Program Applications to participate in child nutrition programs must include attestations and written agreement to the regulations set forth in 7 CFR 210 and 7 CFR 245. Agreements must be signed and returned to Child Nutrition Services (CNS) prior to meal service and the submission of a CFR by the SFA. OSA tested 32 applications from SFAs and sponsors for participation in NSLP and identified six applications that were not complete or were approved prior to participation in the program, as follows: • Three applications were approved for participation with missing information, including: o one application missing an agreement for participation in CEP; o one application not indicating the year of operation; and o one application missing the signature of the SFA superintendent. • Two applications were submitted after participation in the program had begun. • One application was missing the meal pattern agreement attestation that made them eligible for the eight-cent performance-based reimbursement for every lunch served and was also submitted after participation in the program had begun. OSA selected a non-statistical random sample. Summer Food Service Program While SFAs may operate SFSP, residential and non-residential day camps, units of local, municipal, county or State governments, and private nonprofit organizations may also participate in the program; these providers are called sponsors. Sponsors must submit a written application to CNS by June 15 to participate in the program. Sponsors operate individual sites, and sponsor applications must include site sheets for each site. OSA tested 16 applications from sponsors for participation in SFSP and found: • four applications were revised and the revisions were erroneously applied to prior months, resulting in questioned costs totaling $1,767 for meals served prior to approved revisions; and • eleven applications, including two with more than one error, that were approved with sites that did not meet the eligibility criteria, as follows: o Four sponsors had sites where CNS incorrectly categorized non-residential day camps as open sites, which allowed the site to use the area eligibility determination instead of using individual eligibility determinations, resulting in questioned costs totaling $68,342 for meals served without eligibility information provided. o Two sponsors of camps did not provide the number of eligible children for each session at their sites prior to submitting a CFR, resulting in questioned costs totaling $63,493 for meals served without eligibility information provided. o Three sponsors had four sites that used incorrect school or census data to demonstrate eligibility, resulting in one site that was ineligible for participation, and questioned costs totaling $33,682 for the operation of an ineligible site. o One application was approved with a breakfast time of 11:30 a.m.; there was no documentation to support that this meal was served near the site’s opening time as required by regulations, resulting in questioned costs totaling $8,635 for meals that do meet meal time requirements. o Three applications were approved for non-congregate sites that did not include procedures to ensure duplicate meals would not be distributed. One sponsor had seven open sites with overlapping meal times within a quarter-mile radius. OSA selected a non-statistical random sample. In addition, OSA performed analytical procedures over SFSP site classifications and found: • 58 sites from 32 sponsors did not apply eligibility criteria for camp participation, as follows: o 29 sites were classified as open sites or closed enrolled sites when additional information on the application or publicly available information indicated that the program met the definition of camps provided at 7 CFR 225; these sites used area eligibility to claim reimbursement for all meals served instead of only the meals served to eligible children, resulting in questioned costs totaling $208,142. o 9 sites indicated they were camps; however, they were classified as open sites or closed enrolled sites that used area eligibility to claim reimbursement for all meals served instead of only the meals served to eligible children, resulting in questioned costs totaling $100,379. o 13 sites indicated they were camps; however, their applications were not revised to include actual eligibility counts for each session prior to submission of CFRs, resulting in questioned costs totaling $82,567. o 7 sites described camp activities in their description of operations, but classified themselves as open sites or closed enrolled sites that used area eligibility to claim reimbursement for all meals served instead of only the meals served to eligible campers, resulting in questioned costs totaling $48,224. • 16 sponsors had site revisions approved by CNS that added operating days, increased capacities, changed meal types, added meals, or added non-congregate operations to a prior month. CNS permitted sponsors to include those revisions in the prior month’s CFR which were not in accordance with the agreement in place at the time of service, resulting in questioned costs totaling $13,693. Context: CNS processed $55.8 million in CFRs for NSLP, and $2.8 million in CFRs for SFSP in fiscal year 2024. Cause: • Lack of adequate policies and procedures • Lack of supervisory oversight Effect: • CNC participation by ineligible SFAs or sponsors • Known questioned costs • Potential future questioned costs and disallowances • Noncompliance with Federal regulations Recommendation: We recommend that CNS revise policies and procedures to ensure: • SFSP site information sheet revisions prohibit the sponsor from using the revised information in a claim for a prior month; • site classifications appropriately identify camps, consistent with Federal regulations; and • site information sheets contain non-congregate plans that include required information. Additionally, we recommend that CNS enhance oversight to ensure: • all required documents for applications are complete and signed prior to meal service; • session-specific eligibility information is available on the site information sheets for camps; and • the eligibility of the locations of non-congregate sites is properly supported. Corrective Action Plan: See F-15 Management’s Response: The Department agrees with this finding. Procedures for “Application Approvals” will be delineated regarding application and claim revisions, Site classification, non-congregate plan requirements, Eligibility criteria and back up documentation, and all requirement documents will be adequately reviewed. Contact: Jane McLucas, Director of Child Nutrition, DOE, 207-624-6880 (State Number: 24-1203-05)