Finding Reference Number: 2024-005 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02 Federal Award Year: 2022, 2023 U.S. Department of Interior Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements - Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide 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. This would include internal controls related to the cash management process. Condition During the year ended June 30, 2024, the New Hampshire Fish and Game Department (the Department) passed through $484,952 of federal funding to 1 subrecipient to fund 4 different projects. As part of our testwork related subrecipient monitoring, we identified the following: A. The Department communicates award information through the approved grant agreement. For 3 of 4 projects selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR 200.332(b). Specifically, the following elements were not communicated: • Subrecipient's unique entity identifier • Identification of whether the Federal award is for research and development B. As part of the during the award monitoring testwork, we noted that the Department completes a risk assessment questionnaire for all new projects they approve for the subrecipient. As part of our testwork over the risk assessments performed, we identified the following: • For 1 of 4 projects selected for testwork, there was no risk assessment questionnaire completed. • For 3 of 4 projects selected for testwork, a risk assessment questionnaire was completed, however there were no required monitoring procedures outlined within the questionnaire. As a result, we were not able to determine what monitoring procedures should have been performed over the projects as a result of the risk assessment. C. The Department’s during the award monitoring includes the review and approval of the subrecipient’s request for reimbursement. During our testwork over the review and approval of the request for reimbursement, we noted that for all 9 invoices selected for testwork, that while the invoice appeared to be properly reviewed and approved, the level of detail included within the invoice would not allow the Department to determine the reasonableness of the costs incurred to ensure that they were incurred in accordance with the grant agreement. D. The Department’s during the award monitoring includes obtaining a progress report related to each project that the subrecipient has been granted funding for. As part of our testwork, we identified that for all 4 projects selected for testwork, while a progress report was obtained, there was no evidence provided to support that the Department had reviewed the report. As a result, we were unable to determine based on the Department’s risk assessment procedures what the type and frequency of monitoring procedures that should have been performed over each project. E. The Department does not have formal policies and procedures to review and maintain documentation to evidence the review and approval of the subrecipient’s unform guidance report. There was no documentation to support that the Department had obtained and reviewed its subrecipient’s most recent uniform guidance report issued. Cause The cause of the condition found was primarily due to a lack of formal written policies and procedures and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that all subrecipient grant agreements contains all required communications, that a risk assessment is performed that will outline the types and frequency of monitoring procedures to be performed, that all during the award monitoring activities are properly documented and that the receipt and review of the subrecipient’s uniform guidance report is properly documented. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, sufficient documentation was not provided to demonstrate that the Department complied with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h).
Finding Reference Number: 2024-006 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F19AF00556-01, F21AF04030-06, F22AF03670-01 Federal Award Year: 2019, 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: SEFA Reporting Type of Finding: Material Weakness and Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR section 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The New Hampshire Fish and Game Department (the Department) oversees 25 different grants funded under the Fish and Wildlife Cluster (the Program). To assist in the management of the grants, the Department uses QuickBooks as their main system of books and records, rather than the State of New Hampshire’s centralized accounting system, NH First. The Department manually enters expenditure transactional data into QuickBooks and heavily relies on a number of excel tracking sheets to track expenditures, cash draws, and in-kind match earned for each of the 25 grants. During our testwork over the Program, we identified the following: A. For 2 of 25 grants, we identified that there were out of period costs that were included on the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2024. Specifically we identified the following: a. For 1 of the 2 grants, the Department, included $247,562 of the expenditures that were paid between March 17, 2017 and January 13, 2023 and should not have been reported on the June 30, 2024 SEFA, resulting in an overstatement of expenditures. b. For the other 1 of 2 grants, the Department included $761 of expenditures that were paid on February 10, 2023 and should not have been reported on the June 30, 2024 SEFA, resulting in an overstatement of expenditures. B. For 1 of 25 grants, the Department reported on the SEFA the amount reimbursed through the cash draw process as of June 30, 2024 rather than expenditures paid during that same period. As such, the amount reported on the June 30, 2024 SEFA was understated by $14,830. C. For 1 of 25 grants, we were unable to reconcile the amount reported on the SEFA. For the grant, the Department included $2,637,617 of expenditures on the June 30, 2024 SEFA. As part of our review of the expenditures reported, we were unable to recalculate the amount included by the Department. Based upon the total expenditures incurred during the period ending June 30, 2024, it appeared that the amount that should have been reported was $2,755,548. As such, it appeared that the June 30 2024 was understated by $117,931. D. For 5 of 5 grants that reported subrecipient pass through expenditures, it appeared that the Department reported pass-through expenditures on the SEFA that included both the state and federal share of the costs, resulting in the pass-through amount being overstated by $118,195. Cause The cause of the condition found appears to be related to the heavy reliance on manual spreadsheets and QuickBooks. The manual data entry into QuickBooks and the use of spreadsheets are susceptible to human error. As the Department does not have any internal controls in place to ensure the spreadsheets or QuickBooks reconcile to NH First, if there was an error in the data used by the Department, it would be difficult to detect. In addition, the Department incorrectly included prior period costs on the SEFA as it had been believed that since the costs had not previously been reported but were eligible for reimbursement should be included on the June 30, 2024 SEFA. Effect The effect of the condition found is that the expenditures and subrecipient pass through amounts were not accurately presented on the SEFA. Questioned Costs: Not determinable. Recommendation We recommend that the Department develop written policies and procedures and implement internal controls to ensure all spreadsheets utilized to manage the program reconcile to QuickBooks and that QuickBooks reconciles to NH first on a routine basis. The Department should also implement internal controls to evaluate the amounts reported on the SEFA to ensure that only current period expenditures that are eligible for reimbursement are reported on the SEFA. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, we were unable to obtain documentation that supported a reconciliation between QuickBooks and New Hampshire First was performed. The amounts reported on the SEFA by the Department for this program were not complete and accurate.
Finding Reference Number: 2024-007 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF02312-00, F21AF04100-02, F22AF02844-00, F24AF00586-00, F23AF02720-00, F21AF03886-03, F20AF11939-04, F23AF02954-00, F23AF02609-00, F23AF02714-01, F19AF00556-01, F19AF00556-01, F22AF03670-01, F19AF00556-01, F22AF02616-02, F22AF00514-01, F19AF00556-01, F21AF04030-06 Federal Award Year: 2019, 2020 2021, 2022, 2023, 2024 U.S. Department of Interior Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs/Costs Principles Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Per Part 3 of the Compliance Supplement, costs must be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity in order to be allowable under federal awards. Further per 2 CFR section 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grants. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over Activities Allowed or Unallowed/Allowable Costs/Costs Principles, we identified the following: A. For 18 of 25 payroll and fringe benefit costs selected for testwork, we were unable to agree the payroll and fringe benefit costs charged to the Fish and Wildlife Cluster (the program) to the State of New Hampshire’s centralized accounting system, NH First. The New Hampshire Department of Fish and Game (the Department) does not charge payroll and fringe benefit costs incurred by the program as processed in NH First. Instead, the Department utilizes an internally calculated "federal rate" that is used to charge both payroll and fringe benefit costs based upon the number of hours worked to the program. As described by the Department, the federal rate is calculated based upon an employee's fringe benefits, the approved NH First pay rate, and the employee’s years of service. While we were able to recalculate the employee’s payroll and fringe benefit amounts for each of the 20 samples selected testwork as recorded in NH First, we were not able to reconcile this amount to what the Department actually charged the program. A variance of $9,754 was identified and included in the Questioned Cost amount below. B. For 5 of 25 payroll costs selected for testwork, we were unable to obtain support to substantiate the payroll costs recorded by the Department, including the Fish and Game Activity Task Report, which shows the Department's method of allocating time and payroll to the Cluster. As a result, we were unable to reconcile the amount paid in NH First of $11,541 to what the Department had allocated to the program. While we were able to recalculate the employee’s payroll and fringe benefit amounts for each of the 5 samples selected based upon what was recorded in NH First, we were not able to reconcile this amount to what the Department had actually charged the program. Since we were unable to determine what was charged to the program this amount is not a known questioned cost below. C. Indirect costs charged to the program are based upon the Department's "federal rate" calculation of payroll and fringe benefit costs as described above in Bullet A. As a result, we were unable to substantiate the basis upon which the indirect cost rate was applied for all 25 payroll periods for testwork. We further noted that for 2 of 25 payroll periods selected for testwork, the indirect costs drawn down at the time of grant close out in proportion to the payroll drawn down exceeded the 18.19% indirect cost rate that should be applied to payroll. A variance of $1,655 was identified and included in the Questioned Cost amount below. D. During our testwork over the allowability of non-payroll costs, we identified that for 2 of 60 invoices selected for testwork, the invoice was not approved by the Division Chief prior to payment as required. Of the 2 invoices, 1 invoice was approved by the program supervisor and 1 invoice did not contain any evidence of it being approved. While the invoices did not appear to be properly reviewed, the amount paid appeared to be properly supported and as such, no questioned costs were identified. Cause The cause of the condition found is that the Department does not utilize the NH First system as the basis to charge payroll, fringe and indirect costs to the program. As described in the condition found above, the Department performs its own calculation of what the payroll and fringe benefit costs are based upon the Department’s calculated federal rate and then subsequently data enters their calculated expenditure information into QuickBooks. The Department uses QuickBooks to track all federal expenditures under the program by individual federal grant. The Department does not perform any reconciliations to ensure what was entered into QuickBooks reconciles to the NH First system in order to verify that the data in QuickBooks is complete and accurate. In addition, the cause of the condition found related to the review and approval of non-payroll costs is primarily a result of insufficient internal controls in place to ensure all invoices are reviewed and approved prior to payment. Effect The effect of the condition found is that the Department would be unable to detect an error within the amounts data entered into QuickBooks and the amount allocated to the program could be inaccurate. In addition, insufficient review and approval of non-payroll expenditures could result in unallowable costs charged to the program. Questioned Costs: $11,409 Recommendation We recommend that the Department develop written policies and procedures that outline how payroll and fringe benefit costs are charged to the program and implement controls to ensure the amount of payroll and fringe benefits entered into QuickBooks properly reconciles to NH First as part of its routine payroll process. We also recommend that the Department implement internal controls to ensure that the correct indirect cost rate is utilized based upon the applicable time period for which indirect costs are being calculated. Finally, we recommend that the Department review its existing policies and procedures related to the review and approval of non-payroll expenditures to ensure that they are properly reviewed and approved prior to payment. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, the Department did not provide documentation to support that QuickBooks is reconciled to New Hampshire First to ensure that the data within QuickBooks is complete and accurate. Within Bullets B and C were unable to obtain documentation to support these transactions from the Department within a timely manner. As a result of our audit procedures, we identified questioned costs of $11,409. We further note that the NH First system does allow for the allocation of employee salaries to grants from the standard or normal accounting assignment of their costs. The Department has elected not to implement this model.
Finding Reference Number: 2024-008 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F21AF04100-02, F21AF03886-03 Federal Award Year: 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: Matching Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria In-kind match requirement is to test records to corroborate the values placed on in-kind contributions (including third party in-kind contributions) are in accordance with 2 CFR 200.306, 200.434, and 200.414, and the terms and conditions of the award. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To meet the federal match required under the program, the New Hampshire Fish and Game Department (the Department) utilizes in-kind match that is earned from volunteer hours and costs contributed by its third party subrecipient. During our testwork over in-kind match, we identified the following: A. For 7 of 9 subrecipient invoices selected for testwork used to support the Department’s in-kind match, we were unable to obtain documentation to support the amount of the in-kind match earned. For each of the 7 sample selections, the value of the in-kind contribution was handwritten on the subrecipient's invoice for unrelated services. There was no documentation obtained to support the accuracy of this handwritten amount. Upon inquiry, the Department confirmed that no further verification was performed to ensure the subrecipient's in-kind match was accurate and based upon costs in support of the grant associated with the in-kind match. B. For 1 of 4 volunteer in-kind match contribution calculations, the Department incorrectly allocated volunteer hours using the prior fiscal year rates, resulting in an excess of in-kind match being recorded as earned. In addition, we were unable to verify the existence of 1 of the volunteer timesheets used in this calculation for this sample selection. Cause The cause of the condition found is primarily due to insufficient internal controls to ensure that the value of the match contributed by its subrecipient is complete and accurate. Due to the long-standing and collaborative relationship between the Department and the subrecipient, the Department has not developed or implemented formalized policies and procedures related to validating the existence of in-kind match earned. Further, related to the volunteer hours, the cause of the condition is due to human error. With over 250 timesheets to process, the volume of data and calculations are susceptible to error. Effect The effect of the condition found is that the Department did not have appropriate documentation to support the in-kind match earned and applied against its federal award in support of federal funds that were drawn. This could lead to unallowable costs being charged to the grant if the sufficient match was not made. Questioned Costs: $201,250 Recommendation We recommend that the Department implement written policies and procedures surrounding the tracking of in-kind match. Internal controls should be implemented to ensure the accuracy of the in-kind match earned, including ensuring that there is supporting documentation to substantiate the amount earned. The existing policies and procedures should also be enhanced related to volunteer time to monitor to ensure that all required timesheets are completed before using the volunteer time in support of its matching requirement and that the appropriate rate is used when determining the value of the volunteer in-kind match. View of Responsible Officials: Management concurs with this finding except for the questioned cost amount. Rejoinder: As documented within the condition found, we were unable to obtain sufficient documentation to support in-kind matching costs. As a result of our audit procedures, we identified questioned costs of $201,250.
Finding Reference Number: 2024-005 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02 Federal Award Year: 2022, 2023 U.S. Department of Interior Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements - Clearly identify to the subrecipient required award information and applicable requirements described in 2 CFR section 200.332(a). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide 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. This would include internal controls related to the cash management process. Condition During the year ended June 30, 2024, the New Hampshire Fish and Game Department (the Department) passed through $484,952 of federal funding to 1 subrecipient to fund 4 different projects. As part of our testwork related subrecipient monitoring, we identified the following: A. The Department communicates award information through the approved grant agreement. For 3 of 4 projects selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR 200.332(b). Specifically, the following elements were not communicated: • Subrecipient's unique entity identifier • Identification of whether the Federal award is for research and development B. As part of the during the award monitoring testwork, we noted that the Department completes a risk assessment questionnaire for all new projects they approve for the subrecipient. As part of our testwork over the risk assessments performed, we identified the following: • For 1 of 4 projects selected for testwork, there was no risk assessment questionnaire completed. • For 3 of 4 projects selected for testwork, a risk assessment questionnaire was completed, however there were no required monitoring procedures outlined within the questionnaire. As a result, we were not able to determine what monitoring procedures should have been performed over the projects as a result of the risk assessment. C. The Department’s during the award monitoring includes the review and approval of the subrecipient’s request for reimbursement. During our testwork over the review and approval of the request for reimbursement, we noted that for all 9 invoices selected for testwork, that while the invoice appeared to be properly reviewed and approved, the level of detail included within the invoice would not allow the Department to determine the reasonableness of the costs incurred to ensure that they were incurred in accordance with the grant agreement. D. The Department’s during the award monitoring includes obtaining a progress report related to each project that the subrecipient has been granted funding for. As part of our testwork, we identified that for all 4 projects selected for testwork, while a progress report was obtained, there was no evidence provided to support that the Department had reviewed the report. As a result, we were unable to determine based on the Department’s risk assessment procedures what the type and frequency of monitoring procedures that should have been performed over each project. E. The Department does not have formal policies and procedures to review and maintain documentation to evidence the review and approval of the subrecipient’s unform guidance report. There was no documentation to support that the Department had obtained and reviewed its subrecipient’s most recent uniform guidance report issued. Cause The cause of the condition found was primarily due to a lack of formal written policies and procedures and internal controls to ensure that all required subrecipient monitoring compliance procedures are being performed by the Department. Effect The effect of the condition found is that the Department did not comply with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). Questioned Costs: None. Recommendation We recommend the Department develop written policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h). This would ensure that all subrecipient grant agreements contains all required communications, that a risk assessment is performed that will outline the types and frequency of monitoring procedures to be performed, that all during the award monitoring activities are properly documented and that the receipt and review of the subrecipient’s uniform guidance report is properly documented. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, sufficient documentation was not provided to demonstrate that the Department complied with 2 CFR section 200.332(a), 2 CFR section 200.332(b), 2 CFR sections 200.332(d) through (f), and 2 CFR section 200.501(h).
Finding Reference Number: 2024-006 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F19AF00556-01, F21AF04030-06, F22AF03670-01 Federal Award Year: 2019, 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: SEFA Reporting Type of Finding: Material Weakness and Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR section 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The New Hampshire Fish and Game Department (the Department) oversees 25 different grants funded under the Fish and Wildlife Cluster (the Program). To assist in the management of the grants, the Department uses QuickBooks as their main system of books and records, rather than the State of New Hampshire’s centralized accounting system, NH First. The Department manually enters expenditure transactional data into QuickBooks and heavily relies on a number of excel tracking sheets to track expenditures, cash draws, and in-kind match earned for each of the 25 grants. During our testwork over the Program, we identified the following: A. For 2 of 25 grants, we identified that there were out of period costs that were included on the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2024. Specifically we identified the following: a. For 1 of the 2 grants, the Department, included $247,562 of the expenditures that were paid between March 17, 2017 and January 13, 2023 and should not have been reported on the June 30, 2024 SEFA, resulting in an overstatement of expenditures. b. For the other 1 of 2 grants, the Department included $761 of expenditures that were paid on February 10, 2023 and should not have been reported on the June 30, 2024 SEFA, resulting in an overstatement of expenditures. B. For 1 of 25 grants, the Department reported on the SEFA the amount reimbursed through the cash draw process as of June 30, 2024 rather than expenditures paid during that same period. As such, the amount reported on the June 30, 2024 SEFA was understated by $14,830. C. For 1 of 25 grants, we were unable to reconcile the amount reported on the SEFA. For the grant, the Department included $2,637,617 of expenditures on the June 30, 2024 SEFA. As part of our review of the expenditures reported, we were unable to recalculate the amount included by the Department. Based upon the total expenditures incurred during the period ending June 30, 2024, it appeared that the amount that should have been reported was $2,755,548. As such, it appeared that the June 30 2024 was understated by $117,931. D. For 5 of 5 grants that reported subrecipient pass through expenditures, it appeared that the Department reported pass-through expenditures on the SEFA that included both the state and federal share of the costs, resulting in the pass-through amount being overstated by $118,195. Cause The cause of the condition found appears to be related to the heavy reliance on manual spreadsheets and QuickBooks. The manual data entry into QuickBooks and the use of spreadsheets are susceptible to human error. As the Department does not have any internal controls in place to ensure the spreadsheets or QuickBooks reconcile to NH First, if there was an error in the data used by the Department, it would be difficult to detect. In addition, the Department incorrectly included prior period costs on the SEFA as it had been believed that since the costs had not previously been reported but were eligible for reimbursement should be included on the June 30, 2024 SEFA. Effect The effect of the condition found is that the expenditures and subrecipient pass through amounts were not accurately presented on the SEFA. Questioned Costs: Not determinable. Recommendation We recommend that the Department develop written policies and procedures and implement internal controls to ensure all spreadsheets utilized to manage the program reconcile to QuickBooks and that QuickBooks reconciles to NH first on a routine basis. The Department should also implement internal controls to evaluate the amounts reported on the SEFA to ensure that only current period expenditures that are eligible for reimbursement are reported on the SEFA. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, we were unable to obtain documentation that supported a reconciliation between QuickBooks and New Hampshire First was performed. The amounts reported on the SEFA by the Department for this program were not complete and accurate.
Finding Reference Number: 2024-007 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF02312-00, F21AF04100-02, F22AF02844-00, F24AF00586-00, F23AF02720-00, F21AF03886-03, F20AF11939-04, F23AF02954-00, F23AF02609-00, F23AF02714-01, F19AF00556-01, F19AF00556-01, F22AF03670-01, F19AF00556-01, F22AF02616-02, F22AF00514-01, F19AF00556-01, F21AF04030-06 Federal Award Year: 2019, 2020 2021, 2022, 2023, 2024 U.S. Department of Interior Compliance Requirement: Activities Allowed or Unallowed/Allowable Costs/Costs Principles Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Per Part 3 of the Compliance Supplement, costs must be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity in order to be allowable under federal awards. Further per 2 CFR section 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grants. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over Activities Allowed or Unallowed/Allowable Costs/Costs Principles, we identified the following: A. For 18 of 25 payroll and fringe benefit costs selected for testwork, we were unable to agree the payroll and fringe benefit costs charged to the Fish and Wildlife Cluster (the program) to the State of New Hampshire’s centralized accounting system, NH First. The New Hampshire Department of Fish and Game (the Department) does not charge payroll and fringe benefit costs incurred by the program as processed in NH First. Instead, the Department utilizes an internally calculated "federal rate" that is used to charge both payroll and fringe benefit costs based upon the number of hours worked to the program. As described by the Department, the federal rate is calculated based upon an employee's fringe benefits, the approved NH First pay rate, and the employee’s years of service. While we were able to recalculate the employee’s payroll and fringe benefit amounts for each of the 20 samples selected testwork as recorded in NH First, we were not able to reconcile this amount to what the Department actually charged the program. A variance of $9,754 was identified and included in the Questioned Cost amount below. B. For 5 of 25 payroll costs selected for testwork, we were unable to obtain support to substantiate the payroll costs recorded by the Department, including the Fish and Game Activity Task Report, which shows the Department's method of allocating time and payroll to the Cluster. As a result, we were unable to reconcile the amount paid in NH First of $11,541 to what the Department had allocated to the program. While we were able to recalculate the employee’s payroll and fringe benefit amounts for each of the 5 samples selected based upon what was recorded in NH First, we were not able to reconcile this amount to what the Department had actually charged the program. Since we were unable to determine what was charged to the program this amount is not a known questioned cost below. C. Indirect costs charged to the program are based upon the Department's "federal rate" calculation of payroll and fringe benefit costs as described above in Bullet A. As a result, we were unable to substantiate the basis upon which the indirect cost rate was applied for all 25 payroll periods for testwork. We further noted that for 2 of 25 payroll periods selected for testwork, the indirect costs drawn down at the time of grant close out in proportion to the payroll drawn down exceeded the 18.19% indirect cost rate that should be applied to payroll. A variance of $1,655 was identified and included in the Questioned Cost amount below. D. During our testwork over the allowability of non-payroll costs, we identified that for 2 of 60 invoices selected for testwork, the invoice was not approved by the Division Chief prior to payment as required. Of the 2 invoices, 1 invoice was approved by the program supervisor and 1 invoice did not contain any evidence of it being approved. While the invoices did not appear to be properly reviewed, the amount paid appeared to be properly supported and as such, no questioned costs were identified. Cause The cause of the condition found is that the Department does not utilize the NH First system as the basis to charge payroll, fringe and indirect costs to the program. As described in the condition found above, the Department performs its own calculation of what the payroll and fringe benefit costs are based upon the Department’s calculated federal rate and then subsequently data enters their calculated expenditure information into QuickBooks. The Department uses QuickBooks to track all federal expenditures under the program by individual federal grant. The Department does not perform any reconciliations to ensure what was entered into QuickBooks reconciles to the NH First system in order to verify that the data in QuickBooks is complete and accurate. In addition, the cause of the condition found related to the review and approval of non-payroll costs is primarily a result of insufficient internal controls in place to ensure all invoices are reviewed and approved prior to payment. Effect The effect of the condition found is that the Department would be unable to detect an error within the amounts data entered into QuickBooks and the amount allocated to the program could be inaccurate. In addition, insufficient review and approval of non-payroll expenditures could result in unallowable costs charged to the program. Questioned Costs: $11,409 Recommendation We recommend that the Department develop written policies and procedures that outline how payroll and fringe benefit costs are charged to the program and implement controls to ensure the amount of payroll and fringe benefits entered into QuickBooks properly reconciles to NH First as part of its routine payroll process. We also recommend that the Department implement internal controls to ensure that the correct indirect cost rate is utilized based upon the applicable time period for which indirect costs are being calculated. Finally, we recommend that the Department review its existing policies and procedures related to the review and approval of non-payroll expenditures to ensure that they are properly reviewed and approved prior to payment. View of Responsible Officials: Management partially concurs with this finding. Rejoinder: As documented within the condition found, the Department did not provide documentation to support that QuickBooks is reconciled to New Hampshire First to ensure that the data within QuickBooks is complete and accurate. Within Bullets B and C were unable to obtain documentation to support these transactions from the Department within a timely manner. As a result of our audit procedures, we identified questioned costs of $11,409. We further note that the NH First system does allow for the allocation of employee salaries to grants from the standard or normal accounting assignment of their costs. The Department has elected not to implement this model.
Finding Reference Number: 2024-008 NH Fish and Game Department Fish and Wildlife Cluster (Assistance Listing #15.605, #15.611, #15.626) Federal Award Numbers: F22AF00995-00, F22AF00929-00, F23AF03086-00, F22AF00514-01, F22AF02616-02, F21AF04100-02, F21AF03886-03 Federal Award Year: 2021, 2022, 2023 U.S. Department of Interior Compliance Requirement: Matching Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria In-kind match requirement is to test records to corroborate the values placed on in-kind contributions (including third party in-kind contributions) are in accordance with 2 CFR 200.306, 200.434, and 200.414, and the terms and conditions of the award. Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition To meet the federal match required under the program, the New Hampshire Fish and Game Department (the Department) utilizes in-kind match that is earned from volunteer hours and costs contributed by its third party subrecipient. During our testwork over in-kind match, we identified the following: A. For 7 of 9 subrecipient invoices selected for testwork used to support the Department’s in-kind match, we were unable to obtain documentation to support the amount of the in-kind match earned. For each of the 7 sample selections, the value of the in-kind contribution was handwritten on the subrecipient's invoice for unrelated services. There was no documentation obtained to support the accuracy of this handwritten amount. Upon inquiry, the Department confirmed that no further verification was performed to ensure the subrecipient's in-kind match was accurate and based upon costs in support of the grant associated with the in-kind match. B. For 1 of 4 volunteer in-kind match contribution calculations, the Department incorrectly allocated volunteer hours using the prior fiscal year rates, resulting in an excess of in-kind match being recorded as earned. In addition, we were unable to verify the existence of 1 of the volunteer timesheets used in this calculation for this sample selection. Cause The cause of the condition found is primarily due to insufficient internal controls to ensure that the value of the match contributed by its subrecipient is complete and accurate. Due to the long-standing and collaborative relationship between the Department and the subrecipient, the Department has not developed or implemented formalized policies and procedures related to validating the existence of in-kind match earned. Further, related to the volunteer hours, the cause of the condition is due to human error. With over 250 timesheets to process, the volume of data and calculations are susceptible to error. Effect The effect of the condition found is that the Department did not have appropriate documentation to support the in-kind match earned and applied against its federal award in support of federal funds that were drawn. This could lead to unallowable costs being charged to the grant if the sufficient match was not made. Questioned Costs: $201,250 Recommendation We recommend that the Department implement written policies and procedures surrounding the tracking of in-kind match. Internal controls should be implemented to ensure the accuracy of the in-kind match earned, including ensuring that there is supporting documentation to substantiate the amount earned. The existing policies and procedures should also be enhanced related to volunteer time to monitor to ensure that all required timesheets are completed before using the volunteer time in support of its matching requirement and that the appropriate rate is used when determining the value of the volunteer in-kind match. View of Responsible Officials: Management concurs with this finding except for the questioned cost amount. Rejoinder: As documented within the condition found, we were unable to obtain sufficient documentation to support in-kind matching costs. As a result of our audit procedures, we identified questioned costs of $201,250.
Finding Reference Number: 2024-009 NH Department of Business and Economic Affairs WIOA Cluster (Assistance Listing #17.258, #17.259, #17.278) Federal Award Numbers: AA-3633-21-55-A-33, AA-38543-22-A-33, 23A55AW000046-01, 23A55AT000041-01-01, 23A55AY000021-01-00, 23R55MS000053-01-01, 23A60AD000082-01-00, 24A55AY000058-01-00 Federal Award Year: 2021, 2022, 2023, 2024 U.S. Department of Labor Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting, we identified that the Department of Business and Economic Affairs (the Department) did not file any reports in accordance with the Federal Financial Accountability and Transparency Act (FFATA) for the year ended June 30, 2024. Cause The cause of the condition found was primarily due to staffing changes within the Department. While the Department has a policy regarding FFATA reporting, there appears to be insufficient controls in place to ensure that the required FFATA reports were filed. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures and implement include internal ensure all FFATA reports are submitted in compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-009 NH Department of Business and Economic Affairs WIOA Cluster (Assistance Listing #17.258, #17.259, #17.278) Federal Award Numbers: AA-3633-21-55-A-33, AA-38543-22-A-33, 23A55AW000046-01, 23A55AT000041-01-01, 23A55AY000021-01-00, 23R55MS000053-01-01, 23A60AD000082-01-00, 24A55AY000058-01-00 Federal Award Year: 2021, 2022, 2023, 2024 U.S. Department of Labor Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting, we identified that the Department of Business and Economic Affairs (the Department) did not file any reports in accordance with the Federal Financial Accountability and Transparency Act (FFATA) for the year ended June 30, 2024. Cause The cause of the condition found was primarily due to staffing changes within the Department. While the Department has a policy regarding FFATA reporting, there appears to be insufficient controls in place to ensure that the required FFATA reports were filed. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures and implement include internal ensure all FFATA reports are submitted in compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-009 NH Department of Business and Economic Affairs WIOA Cluster (Assistance Listing #17.258, #17.259, #17.278) Federal Award Numbers: AA-3633-21-55-A-33, AA-38543-22-A-33, 23A55AW000046-01, 23A55AT000041-01-01, 23A55AY000021-01-00, 23R55MS000053-01-01, 23A60AD000082-01-00, 24A55AY000058-01-00 Federal Award Year: 2021, 2022, 2023, 2024 U.S. Department of Labor Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: No Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting, we identified that the Department of Business and Economic Affairs (the Department) did not file any reports in accordance with the Federal Financial Accountability and Transparency Act (FFATA) for the year ended June 30, 2024. Cause The cause of the condition found was primarily due to staffing changes within the Department. While the Department has a policy regarding FFATA reporting, there appears to be insufficient controls in place to ensure that the required FFATA reports were filed. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures and implement include internal ensure all FFATA reports are submitted in compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above.
Finding Reference: 2024-010 NH Department of Business and Economic Affairs NH Department of Administrative Services COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency Prior Year Finding: 2023-004 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over suspension and debarment, we identified that for 4 of 112 items selected for testwork related to 60 contracts and 52 subrecipients, there was no supporting documentation that the State had verified either through a signed certification or searching SAM.gov that the entity was not suspended or debarred. As part of our testwork, we reviewed SAM.gov for each of the 4 items and found that none of the entities had been suspended or debarred. Of the 4 sample selections, all 4 selections were contracts. Cause The cause of the condition found is due to insufficient controls and procedures to ensure that for all covered transactions the State determines if the entity covered has been suspended or debarred. Effect The effect of the condition found is that the funds could be paid to an entity that has been suspended or debarred and costs paid to the entity would be unallowable. Questioned Cost: Not determinable. Recommendation We recommend that the State review its existing policies and procedures related to suspension and debarment and ensure that all covered transactions with entities are properly reviewed to verify that the entity has not been suspended and debarred. View of Responsible Officials: Management partially concurs with the finding above. Rejoinder: As documented within the condition found, we were unable to obtain documentation that the Department ensured that the vendor was not suspended or debarred for 4 of 112 samples selected for testwork.
Finding Reference: 2024-011 NH Governor’s Office of Emergency Relief and Recovery COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing #21.027) Federal Award Numbers: SLFRP0145 Federal Award Year: 2021 U.S. Department of Treasury Compliance Requirement: Procurement Type of Finding: Significant Deficiency Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria An entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor. The pass-through entity is responsible for making case-by-case determinations to determine whether the entity receiving Federal funds is a subrecipient or a contractor. The Federal agency may require the pass-through entity to comply with additional guidance to make these determinations, provided such guidance does not conflict with this section. The Federal agency does not have a direct legal relationship with subrecipients or contractors of any tier; however, the Federal agency is responsible for monitoring the pass-through entity's oversight of first-tier subrecipients. All of the characteristics listed below may not be present in all cases, and some characteristics from both categories may be present at the same time. No single factor or any combination of factors is necessarily determinative. The pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract. In making this determination, the substance of the relationship is more important than the form of the agreement (2 CFR 200.331) Additionally, per 2 CFR section 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Coronavirus State and Local Fiscal Recovery Funds program, the State of New Hampshire (the State) entered into grant agreements with local entities and third-party contracts to support allowable activities under the federal program. As part of our testwork over the completeness of the procurement (contracts) and subrecipient grants populations, we identified the following: A. For 91 procurement samples selected for testwork, 12 sample selections did not appear to be contracts. 11 of 12 sample items appeared to be a beneficiary payment. The remaining 1 sample items appeared to be a subrecipient grant agreements. B. For 2 of 24 subrecipient grant samples selected for testwork, 2 sample selections did not appear to be a subrecipient grant. 1 of the 2 sample selections appeared to be a contract and the other 1 was a forgivable loan payment that appeared to be a beneficiary payment. No procurement noncompliance was identified for the contract and subrecipient samples subject to testwork. Cause The cause of the condition found is primarily due to insufficient controls related to the determination of vendor versus subrecipient versus beneficiary payment in order to determine what additional monitoring procedures the State needs to be perform and to determine if the recipient needs to comply with federal compliance requirements. . Effect The effect of the condition found is that the State may not have properly classified contracts, beneficiary and subrecipient awards. Questioned Costs: None. Recommendation We recommend that the State continue to review its vendor determination policy to ensure that the policy is consistently applied across all Department’s within the State. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-012 NH Department of Business and Economic Affairs COVID-19 Capital Projects Fund (Assistance Listing #21.029) Federal Award Number: CPFFN0143 Federal Award Year: 2022 U.S. Department of Treasury Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-006 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria The Project and Expenditure Report for States, Territories & Freely Associated States (PRA 1505-0277) is required to be filed on a quarterly basis. For broadband infrastructure projects, miles of fiber purchased is required to be reported. Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of our testwork over the Project and Expenditure Report for States, Territories & Freely Associated States, we identified the following: A. The total amount expended for administrative expenses within Section 6.1 was under reported by $3,427 for the quarter ending September 30, 2023. B. The actual total miles of fiber deployed, and actual total locations are not tracked by the Department and as a result, we were unable to verify the accuracy of the data reported within section 5.2 for the September 30, 2023 and June 30, 2024 quarterly reports. The Department reported its planned activities only but there were no actual results reported. Cause The cause of the condition found related to bullet A was due an existing internal control deficiency related to the review and approval of the report not being at a precision level that would identify the underreporting of expenses incurred that was identified as part of the June 30, 2023 audit. The Department subsequently implemented their corrective action plan, and a similar error was not identified within the June 30, 2024 quarterly report. In addition, as it relates to the number of funded locations and the planned number of miles of fiber to be deployed, the Department relies upon data provided by their contractors to report this data. The Department has made attempts to obtain this information however the data has not been provided by the contractors so that the amounts reported within the quarterly reports can be updated. Effect The effect of the condition found is that the quarterly project and expenditures reports were not complete and accurate. Questioned Costs: None. Recommendation We recommend that the Department continue to review its existing internal controls over quarterly reporting to ensure that all line items reported are complete and accurate. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-013 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF Grants, we selected 60 out of 394 FFATA reports across 198 different LEAs for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 34 8 25 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $99,319,258 $0 $56,002,866 $6,036,865 $41,275,186 Summary – By Year Year Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements FY21 Count 24 0 9 6 21 FY21 $ $39,289,343 $0 $5,233,893 $4,036,411 $38,341,157 FY22 Count 22 0 22 1 0 FY22 $ $48,539,951 $0 $48,539,951 $124,222 $0 FY23 Count 9 0 3 0 1 FY23 $ $8,090,618 $0 $2,229,022 $0 $286,401 FY24 Count 5 0 0 1 3 FY24 $ $3,399,346 $0 $0 $1,876,232 $2,647,628 Cause The reconciliation control is not operating at a sufficient precision level to ensure completeness and accuracy of the key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-013 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF Grants, we selected 60 out of 394 FFATA reports across 198 different LEAs for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 34 8 25 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $99,319,258 $0 $56,002,866 $6,036,865 $41,275,186 Summary – By Year Year Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements FY21 Count 24 0 9 6 21 FY21 $ $39,289,343 $0 $5,233,893 $4,036,411 $38,341,157 FY22 Count 22 0 22 1 0 FY22 $ $48,539,951 $0 $48,539,951 $124,222 $0 FY23 Count 9 0 3 0 1 FY23 $ $8,090,618 $0 $2,229,022 $0 $286,401 FY24 Count 5 0 0 1 3 FY24 $ $3,399,346 $0 $0 $1,876,232 $2,647,628 Cause The reconciliation control is not operating at a sufficient precision level to ensure completeness and accuracy of the key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-013 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF Grants, we selected 60 out of 394 FFATA reports across 198 different LEAs for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 34 8 25 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $99,319,258 $0 $56,002,866 $6,036,865 $41,275,186 Summary – By Year Year Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements FY21 Count 24 0 9 6 21 FY21 $ $39,289,343 $0 $5,233,893 $4,036,411 $38,341,157 FY22 Count 22 0 22 1 0 FY22 $ $48,539,951 $0 $48,539,951 $124,222 $0 FY23 Count 9 0 3 0 1 FY23 $ $8,090,618 $0 $2,229,022 $0 $286,401 FY24 Count 5 0 0 1 3 FY24 $ $3,399,346 $0 $0 $1,876,232 $2,647,628 Cause The reconciliation control is not operating at a sufficient precision level to ensure completeness and accuracy of the key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-013 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF Grants, we selected 60 out of 394 FFATA reports across 198 different LEAs for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 34 8 25 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $99,319,258 $0 $56,002,866 $6,036,865 $41,275,186 Summary – By Year Year Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements FY21 Count 24 0 9 6 21 FY21 $ $39,289,343 $0 $5,233,893 $4,036,411 $38,341,157 FY22 Count 22 0 22 1 0 FY22 $ $48,539,951 $0 $48,539,951 $124,222 $0 FY23 Count 9 0 3 0 1 FY23 $ $8,090,618 $0 $2,229,022 $0 $286,401 FY24 Count 5 0 0 1 3 FY24 $ $3,399,346 $0 $0 $1,876,232 $2,647,628 Cause The reconciliation control is not operating at a sufficient precision level to ensure completeness and accuracy of the key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-013 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Fund Grants (ESF Grant) to Local Educational Agencies (Local Educational Agencies). During our testwork over FFATA reporting at the Department for ESF Grants, we selected 60 out of 394 FFATA reports across 198 different LEAs for testing and noted the following: Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements 60 0 34 8 25 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $99,319,258 $0 $56,002,866 $6,036,865 $41,275,186 Summary – By Year Year Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward incorrect key elements FY21 Count 24 0 9 6 21 FY21 $ $39,289,343 $0 $5,233,893 $4,036,411 $38,341,157 FY22 Count 22 0 22 1 0 FY22 $ $48,539,951 $0 $48,539,951 $124,222 $0 FY23 Count 9 0 3 0 1 FY23 $ $8,090,618 $0 $2,229,022 $0 $286,401 FY24 Count 5 0 0 1 3 FY24 $ $3,399,346 $0 $0 $1,876,232 $2,647,628 Cause The reconciliation control is not operating at a sufficient precision level to ensure completeness and accuracy of the key elements. Additionally, effective controls were not in place to ensure timely reporting. Effect The effect of the condition found is that the Department did not comply with the Transparency Act reporting requirements. Questioned Costs: None. Recommendation We recommend that the Department continue to enhance policies and procedures which include internal controls across the Department programs to which FFATA reporting is applicable, to ensure timely and accurate reporting to the FSRS system to ensure compliance with the Transparency Act reporting requirements. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-014 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria ESSER, GEER, and EANS grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. LEAs/subrecipients submit data to the SEA/Governor for the SEA’s/Governor’s report. Report Title: ESF – ESSER Recipient Data Collection Form (OMB No 1810-0749) is required to filled annually in the spring based on the State fiscal year. Key line items include: 1. Line 3.b1 LEA expenditures by ESSER Subgrant fund, expenditure category, and object code 2. Line 3.b10 Number of specific positions supported with ESSER Funds 3. Line 3.c Allocation of ESSER funds to schools and criteria used to allocate funds to schools 4. Line 5.a Full Time Equivalent positions Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over special reporting at the Department for ESF Grants, we selected each annual report for ESSER, GEER, and EANS Recipient Data Collection Forms and noted for the ESSER Recipient Data Collection Form, there was no supporting documentation provided to adequately reconcile the difference from the underlying support to the reported amounts for key line item 3.c on the ESSER Recipient Data Collection Form. Discrepancies include the following: A. For ESSER I, total amount of remaining grant funds and amount of remaining funds planned for specific purpose each reported as $0 while underlying support shows $423 for an unreconciled difference of $423. B. For ESSER II, total amount of grant expended by the SEA and all state subrecipients in the reporting period reported as $85,705,938 while underlying support shows $82,847,502 for an unreconciled difference of $2,858,436. C. For ESSER II, total amount of remaining grant funds and amount of remaining funds planned for a specific purpose each reported as $240,920,978 while underlying support shows $243,779,414 for an unreconciled difference of $2,858,436. D. For ESSER III, total amount of SEA Reserve that SEA expended directly in the current reporting period reported as $3,409,199 while underlying support shows $3,133,439 for an unreconciled difference of $275,760. E. For ESSER III, total amount of Summer Enrichment Set Aside reported as $0 while underlying support shows $247,835 for an unreconciled difference of $247,835. F. For ESSER III, total amount of Afterschool Programs Set Aside reported as $709,512 while underlying support shows $1,295,12 for an unreconciled difference of $709,512. G. For ESSER III, total amount of Emergency Needs and/or Admin Costs Set Aside reported as $395,035 while underlying support shows $274,198 for an unreconciled difference of $120,837. Cause The cause of the condition found that there are insufficient policies and procedures in place to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed and that amounts are reconciled to the report. Based on the documentation that was provided to support the data reported within each annual report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is that the ESSER annual report was not complete and accurate when it was filed. Questioned Costs: None. Recommendation We recommend that policies and procedures be developed to ensure that all documentation to support the amounts reported on the ESSER Recipient Data Collection Form is properly maintained for each annual report. In addition, internal control procedures be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documented showing evidence that the required review process was performed prior to submitting the annual Recipient Data Collection Form. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-014 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria ESSER, GEER, and EANS grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. LEAs/subrecipients submit data to the SEA/Governor for the SEA’s/Governor’s report. Report Title: ESF – ESSER Recipient Data Collection Form (OMB No 1810-0749) is required to filled annually in the spring based on the State fiscal year. Key line items include: 1. Line 3.b1 LEA expenditures by ESSER Subgrant fund, expenditure category, and object code 2. Line 3.b10 Number of specific positions supported with ESSER Funds 3. Line 3.c Allocation of ESSER funds to schools and criteria used to allocate funds to schools 4. Line 5.a Full Time Equivalent positions Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over special reporting at the Department for ESF Grants, we selected each annual report for ESSER, GEER, and EANS Recipient Data Collection Forms and noted for the ESSER Recipient Data Collection Form, there was no supporting documentation provided to adequately reconcile the difference from the underlying support to the reported amounts for key line item 3.c on the ESSER Recipient Data Collection Form. Discrepancies include the following: A. For ESSER I, total amount of remaining grant funds and amount of remaining funds planned for specific purpose each reported as $0 while underlying support shows $423 for an unreconciled difference of $423. B. For ESSER II, total amount of grant expended by the SEA and all state subrecipients in the reporting period reported as $85,705,938 while underlying support shows $82,847,502 for an unreconciled difference of $2,858,436. C. For ESSER II, total amount of remaining grant funds and amount of remaining funds planned for a specific purpose each reported as $240,920,978 while underlying support shows $243,779,414 for an unreconciled difference of $2,858,436. D. For ESSER III, total amount of SEA Reserve that SEA expended directly in the current reporting period reported as $3,409,199 while underlying support shows $3,133,439 for an unreconciled difference of $275,760. E. For ESSER III, total amount of Summer Enrichment Set Aside reported as $0 while underlying support shows $247,835 for an unreconciled difference of $247,835. F. For ESSER III, total amount of Afterschool Programs Set Aside reported as $709,512 while underlying support shows $1,295,12 for an unreconciled difference of $709,512. G. For ESSER III, total amount of Emergency Needs and/or Admin Costs Set Aside reported as $395,035 while underlying support shows $274,198 for an unreconciled difference of $120,837. Cause The cause of the condition found that there are insufficient policies and procedures in place to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed and that amounts are reconciled to the report. Based on the documentation that was provided to support the data reported within each annual report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is that the ESSER annual report was not complete and accurate when it was filed. Questioned Costs: None. Recommendation We recommend that policies and procedures be developed to ensure that all documentation to support the amounts reported on the ESSER Recipient Data Collection Form is properly maintained for each annual report. In addition, internal control procedures be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documented showing evidence that the required review process was performed prior to submitting the annual Recipient Data Collection Form. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-014 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria ESSER, GEER, and EANS grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. LEAs/subrecipients submit data to the SEA/Governor for the SEA’s/Governor’s report. Report Title: ESF – ESSER Recipient Data Collection Form (OMB No 1810-0749) is required to filled annually in the spring based on the State fiscal year. Key line items include: 1. Line 3.b1 LEA expenditures by ESSER Subgrant fund, expenditure category, and object code 2. Line 3.b10 Number of specific positions supported with ESSER Funds 3. Line 3.c Allocation of ESSER funds to schools and criteria used to allocate funds to schools 4. Line 5.a Full Time Equivalent positions Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over special reporting at the Department for ESF Grants, we selected each annual report for ESSER, GEER, and EANS Recipient Data Collection Forms and noted for the ESSER Recipient Data Collection Form, there was no supporting documentation provided to adequately reconcile the difference from the underlying support to the reported amounts for key line item 3.c on the ESSER Recipient Data Collection Form. Discrepancies include the following: A. For ESSER I, total amount of remaining grant funds and amount of remaining funds planned for specific purpose each reported as $0 while underlying support shows $423 for an unreconciled difference of $423. B. For ESSER II, total amount of grant expended by the SEA and all state subrecipients in the reporting period reported as $85,705,938 while underlying support shows $82,847,502 for an unreconciled difference of $2,858,436. C. For ESSER II, total amount of remaining grant funds and amount of remaining funds planned for a specific purpose each reported as $240,920,978 while underlying support shows $243,779,414 for an unreconciled difference of $2,858,436. D. For ESSER III, total amount of SEA Reserve that SEA expended directly in the current reporting period reported as $3,409,199 while underlying support shows $3,133,439 for an unreconciled difference of $275,760. E. For ESSER III, total amount of Summer Enrichment Set Aside reported as $0 while underlying support shows $247,835 for an unreconciled difference of $247,835. F. For ESSER III, total amount of Afterschool Programs Set Aside reported as $709,512 while underlying support shows $1,295,12 for an unreconciled difference of $709,512. G. For ESSER III, total amount of Emergency Needs and/or Admin Costs Set Aside reported as $395,035 while underlying support shows $274,198 for an unreconciled difference of $120,837. Cause The cause of the condition found that there are insufficient policies and procedures in place to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed and that amounts are reconciled to the report. Based on the documentation that was provided to support the data reported within each annual report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is that the ESSER annual report was not complete and accurate when it was filed. Questioned Costs: None. Recommendation We recommend that policies and procedures be developed to ensure that all documentation to support the amounts reported on the ESSER Recipient Data Collection Form is properly maintained for each annual report. In addition, internal control procedures be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documented showing evidence that the required review process was performed prior to submitting the annual Recipient Data Collection Form. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-014 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria ESSER, GEER, and EANS grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. LEAs/subrecipients submit data to the SEA/Governor for the SEA’s/Governor’s report. Report Title: ESF – ESSER Recipient Data Collection Form (OMB No 1810-0749) is required to filled annually in the spring based on the State fiscal year. Key line items include: 1. Line 3.b1 LEA expenditures by ESSER Subgrant fund, expenditure category, and object code 2. Line 3.b10 Number of specific positions supported with ESSER Funds 3. Line 3.c Allocation of ESSER funds to schools and criteria used to allocate funds to schools 4. Line 5.a Full Time Equivalent positions Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over special reporting at the Department for ESF Grants, we selected each annual report for ESSER, GEER, and EANS Recipient Data Collection Forms and noted for the ESSER Recipient Data Collection Form, there was no supporting documentation provided to adequately reconcile the difference from the underlying support to the reported amounts for key line item 3.c on the ESSER Recipient Data Collection Form. Discrepancies include the following: A. For ESSER I, total amount of remaining grant funds and amount of remaining funds planned for specific purpose each reported as $0 while underlying support shows $423 for an unreconciled difference of $423. B. For ESSER II, total amount of grant expended by the SEA and all state subrecipients in the reporting period reported as $85,705,938 while underlying support shows $82,847,502 for an unreconciled difference of $2,858,436. C. For ESSER II, total amount of remaining grant funds and amount of remaining funds planned for a specific purpose each reported as $240,920,978 while underlying support shows $243,779,414 for an unreconciled difference of $2,858,436. D. For ESSER III, total amount of SEA Reserve that SEA expended directly in the current reporting period reported as $3,409,199 while underlying support shows $3,133,439 for an unreconciled difference of $275,760. E. For ESSER III, total amount of Summer Enrichment Set Aside reported as $0 while underlying support shows $247,835 for an unreconciled difference of $247,835. F. For ESSER III, total amount of Afterschool Programs Set Aside reported as $709,512 while underlying support shows $1,295,12 for an unreconciled difference of $709,512. G. For ESSER III, total amount of Emergency Needs and/or Admin Costs Set Aside reported as $395,035 while underlying support shows $274,198 for an unreconciled difference of $120,837. Cause The cause of the condition found that there are insufficient policies and procedures in place to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed and that amounts are reconciled to the report. Based on the documentation that was provided to support the data reported within each annual report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is that the ESSER annual report was not complete and accurate when it was filed. Questioned Costs: None. Recommendation We recommend that policies and procedures be developed to ensure that all documentation to support the amounts reported on the ESSER Recipient Data Collection Form is properly maintained for each annual report. In addition, internal control procedures be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documented showing evidence that the required review process was performed prior to submitting the annual Recipient Data Collection Form. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-014 COVID-19 Education Stabilization Fund (Assistance Listing #84.425D, #84.425R, #84.425U, #84.425V, and #84.425W) Federal Award Numbers: S425D210017, S425U210017 Federal Award Year: 2021 U.S. Department of Education Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-008 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria ESSER, GEER, and EANS grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. LEAs/subrecipients submit data to the SEA/Governor for the SEA’s/Governor’s report. Report Title: ESF – ESSER Recipient Data Collection Form (OMB No 1810-0749) is required to filled annually in the spring based on the State fiscal year. Key line items include: 1. Line 3.b1 LEA expenditures by ESSER Subgrant fund, expenditure category, and object code 2. Line 3.b10 Number of specific positions supported with ESSER Funds 3. Line 3.c Allocation of ESSER funds to schools and criteria used to allocate funds to schools 4. Line 5.a Full Time Equivalent positions Additionally, per 2 CFR 200.303, non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During the year ended June 30, 2024, we noted the New Hampshire Department of Education (the Department) passed through $145,806,837 in Education Stabilization Funds (ESF) to subrecipients (Local Educational Agencies). During our testwork over special reporting at the Department for ESF Grants, we selected each annual report for ESSER, GEER, and EANS Recipient Data Collection Forms and noted for the ESSER Recipient Data Collection Form, there was no supporting documentation provided to adequately reconcile the difference from the underlying support to the reported amounts for key line item 3.c on the ESSER Recipient Data Collection Form. Discrepancies include the following: A. For ESSER I, total amount of remaining grant funds and amount of remaining funds planned for specific purpose each reported as $0 while underlying support shows $423 for an unreconciled difference of $423. B. For ESSER II, total amount of grant expended by the SEA and all state subrecipients in the reporting period reported as $85,705,938 while underlying support shows $82,847,502 for an unreconciled difference of $2,858,436. C. For ESSER II, total amount of remaining grant funds and amount of remaining funds planned for a specific purpose each reported as $240,920,978 while underlying support shows $243,779,414 for an unreconciled difference of $2,858,436. D. For ESSER III, total amount of SEA Reserve that SEA expended directly in the current reporting period reported as $3,409,199 while underlying support shows $3,133,439 for an unreconciled difference of $275,760. E. For ESSER III, total amount of Summer Enrichment Set Aside reported as $0 while underlying support shows $247,835 for an unreconciled difference of $247,835. F. For ESSER III, total amount of Afterschool Programs Set Aside reported as $709,512 while underlying support shows $1,295,12 for an unreconciled difference of $709,512. G. For ESSER III, total amount of Emergency Needs and/or Admin Costs Set Aside reported as $395,035 while underlying support shows $274,198 for an unreconciled difference of $120,837. Cause The cause of the condition found that there are insufficient policies and procedures in place to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed and that amounts are reconciled to the report. Based on the documentation that was provided to support the data reported within each annual report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is that the ESSER annual report was not complete and accurate when it was filed. Questioned Costs: None. Recommendation We recommend that policies and procedures be developed to ensure that all documentation to support the amounts reported on the ESSER Recipient Data Collection Form is properly maintained for each annual report. In addition, internal control procedures be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documented showing evidence that the required review process was performed prior to submitting the annual Recipient Data Collection Form. View of Responsible Officials: Management concurs with the finding above
Finding Reference Number: 2024-030 NH Department of Education Disability Insurance/SSI Cluster (Assistance Listing #96.001) Federal Award Numbers: 2304NHDI00, 2404NHD100 Federal Award Year: 2023, 2024 U.S. Social Security Administration Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-019 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. The SSA-4513 – State Agency Report of Obligations for SSA Disability Programs – is due quarterly for each fiscal year still open in order to account for program disbursements and unliquidated obligations (POMS DI 39506.202). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over federal reporting related to the SSA-4513 quarterly report, we identified the following: A. For all 4 of 9 SSA-4513 reports selected for testwork, line item 7 was not checked to identify if the SSA-871 needed to be attached to the report. It is unclear if this needed to be attached or not. B. For all 9 SSA-4513 reports selected for testwork, the reports did not reconcile to the internal tracking sheets provided to validate the amounts reported. For all reports there were variances between the tracking sheets and the dollar amounts included within the federal report within sections 1, 2, 3 and 4. While variances are identified, we noted that the variances were not material overall to the individual line item. C. For all 9 SSA-4513 reports selected for testwork, we were unable to validate the completeness and accuracy of the amounts reported within Section 1 for Columns (A) for Disbursements, (B) for unliquidated obligations and (C) total obligations for line items 1, 2, 3 and 4. As such, we are not able to validate that the amounts reported are complete and accurate. As we were not able to obtain documentation to validate the obligation balances, we are unable to validate the accuracy of amounts reported within Sections 1, 2, and 3 of the report. D. For all 9 of the SSA-4513 reports selected for testwork, there was no support for the difference between the total obligations and cumulative obligational authorization. E. For 1 of 9 SSA-4513 reports selected for testwork, no supporting documentation was provided. F. For 8 of 9 SSA-4513 reports selected for testwork, documentation was not provided for Line Item 2.d, Other Identity obligation & amount Cause The cause of the condition found related to the SSA-4513 was due to insufficient policies and procedures to ensure that all necessary documentation is maintained to support the amounts reported for each federal report filed. Based on the documentation that was provided to support the data reported within each quarterly report, it is unclear if the internal control review procedures performed included a detail review over each line item of the report to ensure the amount reported is complete and accurate. Effect The effect of the condition found is the SSA-4134 reports were not complete and accurate when they were filed. Questioned Costs: None. Recommendation We recommend that the existing policies and procedures be developed to ensure that all documentation to support the amounts reported on the SSA-4513 is properly maintained for each quarterly report. In addition, internal control procedures should be evaluated to ensure that as part of the review process, each line item on the federal report is verified against the supporting documentation to ensure the report is complete and accurate. The review performed should also be properly documenting showing that the required review process was performed prior to submitting the SSA-4513. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-031 NH Department of Education Disability Insurance/SSI Cluster (Assistance Listing #96.001) Federal Award Numbers: 2304NHDI00, 2404NHD100 Federal Award Year: 2023, 2024 U.S. Social Security Administration Compliance Requirement: Special Tests and Provisions – Qualified Providers Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-020 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Each state agency is responsible for comprehensive oversight management of its process and for ensuring accuracy, integrity, and economy of its processes (20 CFR sections 404.519g and 416.919g, and POMS DI 396569.300). As part of these duties, DDSs must have and follow procedures for performing medical license verifications to ensure that only qualified providers perform DDSs tasks. By “qualified,” SSA means that the medical source must: 1. Be currently licensed in the state and have the training and experience to perform the type of examination or tests DDS requests; and 2. Not be barred from participating in Medicare or Medicaid programs or other federal or federally assisted programs (20 CFR sections 404.5159g and 416.919g). Prior to using the services of any medical provider, the DDS must check the System of Award Management (SAM) website. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testwork over the special test and provision related to qualified providers, we identified the following 9 of 9 exceptions: A. For 2 of the 9 new providers selected for testwork, there was no documentation maintained that evidenced inspection of the SAM.gov website to verify the suspension and debarment status for new providers and no information was provided to support the provider had a valid medical license. B. For 3 of the 9 new providers selected for testwork, there was no documentation maintained to support the start date of the individual to verify the inspection of the SAM.gov website was performed prior to use of the provider’s service. C. For the remaining 4 of the 9 new providers selected for testwork, the supporting documentation maintained that evidenced inspection of the SAM.gov website to verify the suspension and debarment status for the provider occurred subsequent to the individual’s start date. Cause The cause of the condition found is primarily due to insufficient policies and procedures to verify a provider’s had a valid medical license or the provider’s suspension and debarment status had been reviewed within SAM.gov prior to use of services by the provider as required by the federal regulations. In response to the prior year finding corrective actions were being implemented after June 30, 2024 and not all personnel were following the policies and procedures. There does not appear to be sufficient internal controls in place to ensure that reviews of provider’s licenses and suspension and debarment status are performed, completed and properly documented and sufficient documentation is maintained and reviewed. Effect The effect of the condition found is that documentation to support the qualifications of providers has not been appropriately maintained and providers could have been used that did not meet the criteria to be a qualified provider. Questioned Costs: Not determinable. Recommendation We recommend that written policies and procedures be developed and followed by all personnel to outline what the required procedures are related to reviewing professional licenses and suspension and debarment status for new provider. The policies should describe how the reviews will be performed, how the review will be documented, and the timing of when reviews will be performed relative to the provider’s start date. Internal controls should be implemented to ensure that an appropriate review over the review is conducted to ensure that the review is performed, completed and accurate documentation maintained. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-032 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4624-DR-NH, FEMA-4329-DR Federal Award Year: July 29-30, 2021, July 1-2, 2017 U.S. Department of Homeland Security Compliance Requirement: Special Tests and Provisions - Project Accounting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-021 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria For large projects, the recipient is required to make an accounting to the Federal Emergency Management Agency (FEMA) of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During testwork over the Special Test - Project Accounting, the engagement team sampled 2 large ongoing projects and identified the following: A. For 1 of 2 ongoing projects, the award letter did not include any language outlining the project certification requirements in which the subrecipient must attest to. B. For 2 of 2 ongoing projects, the Department could not provide evidence of the project accounting reporting made to FEMA in compliance with required certification. Specifically, the Department has a process whereby the Project Completion and Certification reports are to be completed and submitted to the Department by subrecipients within 90 days of the project obligation date. The Department then submits a certification report on the first of each month on the reports submitted during the previous month. However, the engagement team requested evidence of the Project Completion and Certification report being received from the subrecipient or it being sent to FEMA and it could not be provided. Cause This control is not operating at a sufficient precision level to ensure the accounting certification reports were sent to FEMA and maintained as evidence of control operation. Effect The effect of the condition found is that the Department did not comply with 44 CFR section 206.205 and 45 CFR section 75 303(a). Questioned Costs: None. Recommendation We recommend that the Department enhance policies and procedures which include internal controls to ensure project accounting completion and certification reports are sent to FEMA and maintained on file as evidence of compliance with the Project Accounting certification requirements. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-032 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4624-DR-NH, FEMA-4329-DR Federal Award Year: July 29-30, 2021, July 1-2, 2017 U.S. Department of Homeland Security Compliance Requirement: Special Tests and Provisions - Project Accounting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-021 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria For large projects, the recipient is required to make an accounting to the Federal Emergency Management Agency (FEMA) of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. For improved and alternate projects, if the total cost of the projects does not equal or exceed the approved eligible costs, then the auditor should expect to see an adjustment to reduce eligible costs (44 CFR section 206.205). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During testwork over the Special Test - Project Accounting, the engagement team sampled 2 large ongoing projects and identified the following: A. For 1 of 2 ongoing projects, the award letter did not include any language outlining the project certification requirements in which the subrecipient must attest to. B. For 2 of 2 ongoing projects, the Department could not provide evidence of the project accounting reporting made to FEMA in compliance with required certification. Specifically, the Department has a process whereby the Project Completion and Certification reports are to be completed and submitted to the Department by subrecipients within 90 days of the project obligation date. The Department then submits a certification report on the first of each month on the reports submitted during the previous month. However, the engagement team requested evidence of the Project Completion and Certification report being received from the subrecipient or it being sent to FEMA and it could not be provided. Cause This control is not operating at a sufficient precision level to ensure the accounting certification reports were sent to FEMA and maintained as evidence of control operation. Effect The effect of the condition found is that the Department did not comply with 44 CFR section 206.205 and 45 CFR section 75 303(a). Questioned Costs: None. Recommendation We recommend that the Department enhance policies and procedures which include internal controls to ensure project accounting completion and certification reports are sent to FEMA and maintained on file as evidence of compliance with the Project Accounting certification requirements. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-033 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH, FEMA-4740-DR, FEMA-4771-DR Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-25, 2022, November 1, 2017, July 1-2, 2017, January 20, 2020, September 14, 2023, April 19, 2024 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition New Hampshire Department of Safety (the Department) during the year ended June 30, 2024, $109,539,714 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During our testwork over FFATA reporting, we identified the following: A. For the period ending June 30, 2024, we have identified that 10 of the 53 reports submitted were not submitted timely. B. For 1 of 8 reports selected for testwork, the report was missing an obligated awards noted within the expenditure detail provided by the Department that should have been reported. C. For 1 of 8 reports selected for testwork, the Department was unable to provide us with a copy of one of the submitted FFATA reports selected for testing. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 1 10 Unknown Unknown Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $1,616,072 $919,070 Unknown Unknown Unknown Cause The cause of the condition found was primarily due to insufficient internal controls and resources within the Department to ensure that FFATA reports were filed and that the reports filed were complete and accurate. Effect The effect of the condition found is that the inaccurate and not timely FFATA reports can be filed. Questioned Costs: None. Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-033 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH, FEMA-4740-DR, FEMA-4771-DR Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-25, 2022, November 1, 2017, July 1-2, 2017, January 20, 2020, September 14, 2023, April 19, 2024 U.S. Department of Homeland Security Compliance Requirement: Reporting Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: N/A Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (FFATA) (Pub. L. No. 109-282), as amended by Section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition New Hampshire Department of Safety (the Department) during the year ended June 30, 2024, $109,539,714 was passed through to subrecipients that met the requirements for first tier subawards under the Transparency Act and as such FFATA reports were required to be filed for each of those subawards. During our testwork over FFATA reporting, we identified the following: A. For the period ending June 30, 2024, we have identified that 10 of the 53 reports submitted were not submitted timely. B. For 1 of 8 reports selected for testwork, the report was missing an obligated awards noted within the expenditure detail provided by the Department that should have been reported. C. For 1 of 8 reports selected for testwork, the Department was unable to provide us with a copy of one of the submitted FFATA reports selected for testing. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 8 1 10 Unknown Unknown Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $1,616,072 $919,070 Unknown Unknown Unknown Cause The cause of the condition found was primarily due to insufficient internal controls and resources within the Department to ensure that FFATA reports were filed and that the reports filed were complete and accurate. Effect The effect of the condition found is that the inaccurate and not timely FFATA reports can be filed. Questioned Costs: None. Recommendation We recommend that the Department implement written policies, procedures and internal controls to ensure the accuracy of the data reported within FSRS and to ensure that reports are filed timely. View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-034 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-023 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During the year ended June 30, 2024, $41,851,050 was passed through to 85 subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for each of the 17 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: • Identification of whether the award is R&D was not communicated for 13 of 17 subrecipients selected for testwork; and • Indirect cost rate for the federal award was not communicated for 13 of 17 subrecipients selected for testwork B. For 4 of 17 subrecipients selected for testwork, while a risk assessment was performed, the Department did not perform it within calendar year of when the award was obligated as outlined within their policies and procedures. C. For 1 of 17 subrecipients selected for testwork, the risk assessment form was not dated or initialed to indicted when the risk assessment procedures were performed. As such, it was unclear if the risk assessment was completed timely. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted there were no uniform guidance report review policies and procedures in place. For the 17 subrecipients selected for testwork, 5 subrecipients were identified in which the Department did not review the most recent uniform guidance report issued. Specifically, we noted: • For 4 of 5 subrecipients, the subrecipient’s uniform guidance report was not reviewed due to updated risk assessments not being performed in the current year. • For 1 of 5 subrecipients, the current year risk assessment was performed prior to the receipt of the subrecipient’s uniform guidance report and management did not go back to review the report. Cause The cause of the condition found was primarily due to the Department not following their sub monitoring internal controls in accordance with written formal policies and procedures. Questioned Costs: None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials: Management concurs with the finding above.
Finding Reference Number: 2024-034 NH Department of Safety Disaster Grants – Public Assistance (Presidentially Declared Disasters) and COVID-19 Public Assistance (Presidentially Declared Disasters) (Assistance Listing #97.036) Federal Award Numbers: FEMA-4622-DR-NH, FEMA-4624-DR-NH, FEMA-4457-DR-NH, FEMA-4370-DR, FEMA-4693-DR, FEMA-4355-DR, FEMA-4329-DR, FEMA-4516-DR-NH Federal Award Year: July 17-19, 2021, July 29-30, 2021, July 11-12, 2019, March 2-8, 2018, December 22-December 25, 2022, October 29-November 1, 2017, July 1-2, 2017, January 20, 2020 U.S. Department of Homeland Security Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness and Material Noncompliance Prior Year Finding: 2023-023 Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Criteria A pass-through entity (PTE) must: 1. Identify the Award and Applicable Requirements – Clearly identify to the subrecipient: (1) the award as a subaward at the time of subaward (or subsequent subaward modification) by providing the information described in 2 CFR section 200.332(a)(1); (2) all requirements imposed by the PTE on the subrecipient so that the federal award is used in accordance with federal statutes, regulations, and the terms and conditions of the award (2 CFR section 200.332(a)(2)); and (3) any additional requirements that the PTE imposes on the subrecipient in order for the PTE to meet its own responsibility for the federal award (e.g., financial, performance, and special reports) (2 CFR section 200.332(a)(3)). 2. Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.332(b)). 3. Monitor – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals (2 CFR sections 200.332(d) through (f)). In addition to procedures identified as necessary based upon the evaluation of subrecipient risk or specifically required by the terms and conditions of the award, subaward monitoring must include the following: a. Reviewing financial and programmatic (performance and special reports) required by the PTE. b. Following up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the federal award provided to the subrecipient from the PTE detected through audits, on-site reviews, and other means. c. Issuing a management decision for audit findings pertaining to the federal award provided to the subrecipient from the PTE as required by 2 CFR section 200.521. Additionally, 2 CFR 200.303 (a) states that non-federal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition As part of the Disaster Grants - Public Assistance program (DGPA), the New Hampshire Department of Safety - Homeland Security and Emergency Management (the Department) enters into grant agreements with local municipalities to provide reimbursement for expenditures incurred as a result of New Hampshire declared disasters. During the year ended June 30, 2024, $41,851,050 was passed through to 85 subrecipients. As part of our testwork over the subrecipient monitoring process, we noted the following: A. The Department communicates award information to subrecipients through the approved agreement. Per review of the agreement, for each of the 17 subrecipients selected for testwork, the Department did not communicate all the required award information as outlined in 2 CFR section 200.332(a). Specifically, the following elements were not communicated: • Identification of whether the award is R&D was not communicated for 13 of 17 subrecipients selected for testwork; and • Indirect cost rate for the federal award was not communicated for 13 of 17 subrecipients selected for testwork B. For 4 of 17 subrecipients selected for testwork, while a risk assessment was performed, the Department did not perform it within calendar year of when the award was obligated as outlined within their policies and procedures. C. For 1 of 17 subrecipients selected for testwork, the risk assessment form was not dated or initialed to indicted when the risk assessment procedures were performed. As such, it was unclear if the risk assessment was completed timely. D. During our testwork over the Department’s review of subrecipient uniform guidance reports, we noted there were no uniform guidance report review policies and procedures in place. For the 17 subrecipients selected for testwork, 5 subrecipients were identified in which the Department did not review the most recent uniform guidance report issued. Specifically, we noted: • For 4 of 5 subrecipients, the subrecipient’s uniform guidance report was not reviewed due to updated risk assessments not being performed in the current year. • For 1 of 5 subrecipients, the current year risk assessment was performed prior to the receipt of the subrecipient’s uniform guidance report and management did not go back to review the report. Cause The cause of the condition found was primarily due to the Department not following their sub monitoring internal controls in accordance with written formal policies and procedures. Questioned Costs: None. Recommendation We recommend that the Department develop policies and procedures and implement internal controls to ensure that the Department complies with 2 CFR section 200.332(a-h) and 2 CFR section 200.501(h). View of Responsible Officials: Management concurs with the finding above.
2024-001 Unit of Service Documentation – Internal Controls over Activities Allowed and Reporting (Significant Deficiency) Federal Program Information: Funding Agency: U.S. Department of Health and Human Services FALN: 93.597 Federal Award Identification Numbers: 42700-401-0001077629, 42700-401-0000112068 Pass Through Entity: Georgia Department of Human Services Award Year: 2022-2023, 2023-2024 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: The documentation related to one unit of service was not maintained; and therefore, no documentation of controls over the allowable activity requirement. In addition, the form was not included in the reporting package. Effect: The inconsistent implementation of the controls could result in unallowable activities or incorrect reporting related to the federal program. Cause: The controls over the maintenance of the supporting documentation were implemented inconsistently. Known and Likely Questioned Costs: None Perspective: This finding does not represent a systematic problem. Repeat Finding: No Recommendation: We recommend the Agency ensure the current controls be implemented consistently and consider implementing additional controls to ensure all program activities are allowable, and the reporting is accurately completed.
2024-001 Unit of Service Documentation – Internal Controls over Activities Allowed and Reporting (Significant Deficiency) Federal Program Information: Funding Agency: U.S. Department of Health and Human Services FALN: 93.597 Federal Award Identification Numbers: 42700-401-0001077629, 42700-401-0000112068 Pass Through Entity: Georgia Department of Human Services Award Year: 2022-2023, 2023-2024 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Condition: The documentation related to one unit of service was not maintained; and therefore, no documentation of controls over the allowable activity requirement. In addition, the form was not included in the reporting package. Effect: The inconsistent implementation of the controls could result in unallowable activities or incorrect reporting related to the federal program. Cause: The controls over the maintenance of the supporting documentation were implemented inconsistently. Known and Likely Questioned Costs: None Perspective: This finding does not represent a systematic problem. Repeat Finding: No Recommendation: We recommend the Agency ensure the current controls be implemented consistently and consider implementing additional controls to ensure all program activities are allowable, and the reporting is accurately completed.
2024 – 001: Special Tests and Provisions: Gramm-Leach Bliley Act (GLBA) Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Gramm-Leach Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The regulation states that the college must designate a qualified individual responsible for overseeing and implementing your information security program and enforcing your information security program (16 CFR 314.4(a). The entity shall have a Written Information Security Program (WISP) that outlines the design and implementation of the risk assessment procedures. (16 CFR 314.4(b). At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d). Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University has a Written information Security Program; however, the University did not meet the minimum requirements stated in the Gramm-Leach-Bliley Act. Questioned costs: None. Context: These GLBA requirements were applicable beginning on June 9, 2023, and there were multiple elements missing from their Written Information Security Program. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: The University was not in Gramm-Leach-Bliley compliance standards. Repeat finding: Yes, 2023-002 Recommendation: We recommend that the University review the updated GLBA requirements and ensure their WISP includes all required elements. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 002: Eligibility: Loan Notifications Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not properly notify students when loans were credited to the student's ledger account. Questioned costs: None. Context: During our Eligibility testing of 40 students, we identified that there was 1 student that received loan disbursements however, did not receive the required notification for the Fall 2023 term loan disbursement. Cause: Due to a clerical error, the Fall 2023 loan notifications was not sent to the student. Effect: Tailored award disbursement notifications inform the student or parent of the right to cancel all or a portion of that loan or loan disbursements and have the loan proceeds returned to the holder of that loan. The notifications also outline the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Repeat finding: Yes, 2023-003 Recommendation: We recommend the University evaluate its procedures around disbursements of loans and ensure that notifications of disbursements are sent and contain all the required elements outlined in the FSA handbook. Views of responsible officials: There is no disagreement with the audit finding.
2024-003: Reporting: Common Origination and Disbursement Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Department of Education requires institutions to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. 2024-003: Reporting: Common Origination and Disbursement (Continued) Condition: During testing of Common Origination and Disbursement reporting, we noted 1 instance of noncompliance. Questioned costs: None. Context: During our testing of 40 COD disbursements we identified, 1 disbursement was not reported within the required 15 days. Cause: The University has not implemented precise review controls to ensure compliance with accurate and timely reporting or disbursement dates and amounts. Effect: Student interest accrues based on disbursement date reported to COD, thus interest calculation could be misstated due to the discrepancy in disbursement dates reported. Repeat finding: Yes, 2023-005 Recommendation: We recommend that the Student Financial Aid department work to ensure disbursements are reported to COD within 15 days of the disbursement date and that disbursements date reported in COD matches the disbursement date to the student. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 001: Special Tests and Provisions: Gramm-Leach Bliley Act (GLBA) Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Gramm-Leach Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The regulation states that the college must designate a qualified individual responsible for overseeing and implementing your information security program and enforcing your information security program (16 CFR 314.4(a). The entity shall have a Written Information Security Program (WISP) that outlines the design and implementation of the risk assessment procedures. (16 CFR 314.4(b). At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d). Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University has a Written information Security Program; however, the University did not meet the minimum requirements stated in the Gramm-Leach-Bliley Act. Questioned costs: None. Context: These GLBA requirements were applicable beginning on June 9, 2023, and there were multiple elements missing from their Written Information Security Program. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: The University was not in Gramm-Leach-Bliley compliance standards. Repeat finding: Yes, 2023-002 Recommendation: We recommend that the University review the updated GLBA requirements and ensure their WISP includes all required elements. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 002: Eligibility: Loan Notifications Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not properly notify students when loans were credited to the student's ledger account. Questioned costs: None. Context: During our Eligibility testing of 40 students, we identified that there was 1 student that received loan disbursements however, did not receive the required notification for the Fall 2023 term loan disbursement. Cause: Due to a clerical error, the Fall 2023 loan notifications was not sent to the student. Effect: Tailored award disbursement notifications inform the student or parent of the right to cancel all or a portion of that loan or loan disbursements and have the loan proceeds returned to the holder of that loan. The notifications also outline the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Repeat finding: Yes, 2023-003 Recommendation: We recommend the University evaluate its procedures around disbursements of loans and ensure that notifications of disbursements are sent and contain all the required elements outlined in the FSA handbook. Views of responsible officials: There is no disagreement with the audit finding.
2024-003: Reporting: Common Origination and Disbursement Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Department of Education requires institutions to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. 2024-003: Reporting: Common Origination and Disbursement (Continued) Condition: During testing of Common Origination and Disbursement reporting, we noted 1 instance of noncompliance. Questioned costs: None. Context: During our testing of 40 COD disbursements we identified, 1 disbursement was not reported within the required 15 days. Cause: The University has not implemented precise review controls to ensure compliance with accurate and timely reporting or disbursement dates and amounts. Effect: Student interest accrues based on disbursement date reported to COD, thus interest calculation could be misstated due to the discrepancy in disbursement dates reported. Repeat finding: Yes, 2023-005 Recommendation: We recommend that the Student Financial Aid department work to ensure disbursements are reported to COD within 15 days of the disbursement date and that disbursements date reported in COD matches the disbursement date to the student. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 001: Special Tests and Provisions: Gramm-Leach Bliley Act (GLBA) Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Gramm-Leach Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The regulation states that the college must designate a qualified individual responsible for overseeing and implementing your information security program and enforcing your information security program (16 CFR 314.4(a). The entity shall have a Written Information Security Program (WISP) that outlines the design and implementation of the risk assessment procedures. (16 CFR 314.4(b). At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d). Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University has a Written information Security Program; however, the University did not meet the minimum requirements stated in the Gramm-Leach-Bliley Act. Questioned costs: None. Context: These GLBA requirements were applicable beginning on June 9, 2023, and there were multiple elements missing from their Written Information Security Program. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: The University was not in Gramm-Leach-Bliley compliance standards. Repeat finding: Yes, 2023-002 Recommendation: We recommend that the University review the updated GLBA requirements and ensure their WISP includes all required elements. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 002: Eligibility: Loan Notifications Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not properly notify students when loans were credited to the student's ledger account. Questioned costs: None. Context: During our Eligibility testing of 40 students, we identified that there was 1 student that received loan disbursements however, did not receive the required notification for the Fall 2023 term loan disbursement. Cause: Due to a clerical error, the Fall 2023 loan notifications was not sent to the student. Effect: Tailored award disbursement notifications inform the student or parent of the right to cancel all or a portion of that loan or loan disbursements and have the loan proceeds returned to the holder of that loan. The notifications also outline the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Repeat finding: Yes, 2023-003 Recommendation: We recommend the University evaluate its procedures around disbursements of loans and ensure that notifications of disbursements are sent and contain all the required elements outlined in the FSA handbook. Views of responsible officials: There is no disagreement with the audit finding.
2024-003: Reporting: Common Origination and Disbursement Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Department of Education requires institutions to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. 2024-003: Reporting: Common Origination and Disbursement (Continued) Condition: During testing of Common Origination and Disbursement reporting, we noted 1 instance of noncompliance. Questioned costs: None. Context: During our testing of 40 COD disbursements we identified, 1 disbursement was not reported within the required 15 days. Cause: The University has not implemented precise review controls to ensure compliance with accurate and timely reporting or disbursement dates and amounts. Effect: Student interest accrues based on disbursement date reported to COD, thus interest calculation could be misstated due to the discrepancy in disbursement dates reported. Repeat finding: Yes, 2023-005 Recommendation: We recommend that the Student Financial Aid department work to ensure disbursements are reported to COD within 15 days of the disbursement date and that disbursements date reported in COD matches the disbursement date to the student. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 001: Special Tests and Provisions: Gramm-Leach Bliley Act (GLBA) Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Gramm-Leach Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The regulation states that the college must designate a qualified individual responsible for overseeing and implementing your information security program and enforcing your information security program (16 CFR 314.4(a). The entity shall have a Written Information Security Program (WISP) that outlines the design and implementation of the risk assessment procedures. (16 CFR 314.4(b). At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d). Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University has a Written information Security Program; however, the University did not meet the minimum requirements stated in the Gramm-Leach-Bliley Act. Questioned costs: None. Context: These GLBA requirements were applicable beginning on June 9, 2023, and there were multiple elements missing from their Written Information Security Program. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: The University was not in Gramm-Leach-Bliley compliance standards. Repeat finding: Yes, 2023-002 Recommendation: We recommend that the University review the updated GLBA requirements and ensure their WISP includes all required elements. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 002: Eligibility: Loan Notifications Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not properly notify students when loans were credited to the student's ledger account. Questioned costs: None. Context: During our Eligibility testing of 40 students, we identified that there was 1 student that received loan disbursements however, did not receive the required notification for the Fall 2023 term loan disbursement. Cause: Due to a clerical error, the Fall 2023 loan notifications was not sent to the student. Effect: Tailored award disbursement notifications inform the student or parent of the right to cancel all or a portion of that loan or loan disbursements and have the loan proceeds returned to the holder of that loan. The notifications also outline the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Repeat finding: Yes, 2023-003 Recommendation: We recommend the University evaluate its procedures around disbursements of loans and ensure that notifications of disbursements are sent and contain all the required elements outlined in the FSA handbook. Views of responsible officials: There is no disagreement with the audit finding.
2024-003: Reporting: Common Origination and Disbursement Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Department of Education requires institutions to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. 2024-003: Reporting: Common Origination and Disbursement (Continued) Condition: During testing of Common Origination and Disbursement reporting, we noted 1 instance of noncompliance. Questioned costs: None. Context: During our testing of 40 COD disbursements we identified, 1 disbursement was not reported within the required 15 days. Cause: The University has not implemented precise review controls to ensure compliance with accurate and timely reporting or disbursement dates and amounts. Effect: Student interest accrues based on disbursement date reported to COD, thus interest calculation could be misstated due to the discrepancy in disbursement dates reported. Repeat finding: Yes, 2023-005 Recommendation: We recommend that the Student Financial Aid department work to ensure disbursements are reported to COD within 15 days of the disbursement date and that disbursements date reported in COD matches the disbursement date to the student. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 001: Special Tests and Provisions: Gramm-Leach Bliley Act (GLBA) Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Gramm-Leach Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The regulation states that the college must designate a qualified individual responsible for overseeing and implementing your information security program and enforcing your information security program (16 CFR 314.4(a). The entity shall have a Written Information Security Program (WISP) that outlines the design and implementation of the risk assessment procedures. (16 CFR 314.4(b). At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d). Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University has a Written information Security Program; however, the University did not meet the minimum requirements stated in the Gramm-Leach-Bliley Act. Questioned costs: None. Context: These GLBA requirements were applicable beginning on June 9, 2023, and there were multiple elements missing from their Written Information Security Program. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: The University was not in Gramm-Leach-Bliley compliance standards. Repeat finding: Yes, 2023-002 Recommendation: We recommend that the University review the updated GLBA requirements and ensure their WISP includes all required elements. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 002: Eligibility: Loan Notifications Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 34 CFR 668.165, states that an institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3)the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The University did not properly notify students when loans were credited to the student's ledger account. Questioned costs: None. Context: During our Eligibility testing of 40 students, we identified that there was 1 student that received loan disbursements however, did not receive the required notification for the Fall 2023 term loan disbursement. Cause: Due to a clerical error, the Fall 2023 loan notifications was not sent to the student. Effect: Tailored award disbursement notifications inform the student or parent of the right to cancel all or a portion of that loan or loan disbursements and have the loan proceeds returned to the holder of that loan. The notifications also outline the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Repeat finding: Yes, 2023-003 Recommendation: We recommend the University evaluate its procedures around disbursements of loans and ensure that notifications of disbursements are sent and contain all the required elements outlined in the FSA handbook. Views of responsible officials: There is no disagreement with the audit finding.
2024-003: Reporting: Common Origination and Disbursement Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: The Department of Education requires institutions to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. 2024-003: Reporting: Common Origination and Disbursement (Continued) Condition: During testing of Common Origination and Disbursement reporting, we noted 1 instance of noncompliance. Questioned costs: None. Context: During our testing of 40 COD disbursements we identified, 1 disbursement was not reported within the required 15 days. Cause: The University has not implemented precise review controls to ensure compliance with accurate and timely reporting or disbursement dates and amounts. Effect: Student interest accrues based on disbursement date reported to COD, thus interest calculation could be misstated due to the discrepancy in disbursement dates reported. Repeat finding: Yes, 2023-005 Recommendation: We recommend that the Student Financial Aid department work to ensure disbursements are reported to COD within 15 days of the disbursement date and that disbursements date reported in COD matches the disbursement date to the student. Views of responsible officials: There is no disagreement with the audit finding.
Reference Number 2024-002 Federal Program: 21.027 – Coronavirus State and Local Fiscal Recovery Funds Federal Agency U.S. Department of Treasury Pass-Through Entity State of California Evaluation of Finding Significant Deficiency Compliance Area L – Reporting Condition During the allowable cost testing for the 21.027 Coronavirus State and Local Fiscal Recovery Funds program, it was found that an expenditure of $945,041 was recorded in the wrong period. The invoice indicated that the services were rendered as of June 30, 2023, but the expenditure was recorded as July 1, 2023 instead. This misstatement impacts the accuracy of financial reporting and grant compliance. Criteria According to 2 CFR 200.302(b)(3) and 2 CFR 200.303, entities receiving federal funds must maintain effective internal controls over financial reporting to ensure accurate and timely recognition of expenditures in the appropriate period. Cause of Condition The City's internal controls over financial reporting and expenditure recognition were not effectively designed or implemented, leading to recurring errors in the timing of recorded expenditures. Effect or Potential Effect of Condition Improper recording of expenditures can lead to misstatements in financial reports, noncompliance with federal grant requirements, and potential audit findings. Continued recurrence of this issue may impact the entity’s ability to demonstrate sound financial management practices. Recommendation We recommend that management continue to strengthen internal controls over expenditure recognition by implementing enhanced review procedures and periodic reconciliations to ensure expenditures are recorded in the appropriate period. Client Response The City agrees with the recommendation and has implemented new procedures and review processes to ensure expenditures for federal programs are recognized in the appropriate fiscal year's Schedule of Expenditures of Federal Awards (SEFA).