Reference Number: 2024-002 Prior Year Finding: 2023-001 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: 24A55UI000025 (10/1/2023-12/31/2026) UI-39337-23-55-A-34 (10/1/2022-12/31/2025) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Pandemic Unemployment Assistance (PUA) – PUA provides benefits to covered individuals, who are those individuals not eligible for regular unemployment compensation (UC or extended benefits under state or federal law or Pandemic Emergency Unemployment Compensation (PEUC), including those who have exhausted all rights to such benefits. Covered individuals also include self-employed, those seeking part-time employment, individuals lacking sufficient work history, and those who otherwise do not qualify for regular unemployment compensation or extended benefits under state or federal law or PEUC. PUA is payable to individuals who are ineligible for regular UC, and are unemployed, partially unemployed, or unable or unavailable to work due to one of the COVID-19 related reasons identified Attachment I to UIPL No. 16-20, Change 5. Section 2102(a)(3)(A)(ii)(I) of the CARES Act included 10 specific COVID-19 related reasons. The Department, under the authority provided by Section 2102(a)(3)(A)(ii)(I)(kk) of the CARES Act, has added additional COVID-19 related reasons; these are discussed in more detail in Section 4.a. of UIPL No. 16-20, Change 5. While three of these new COVID-19 related reasons were introduced to states with the publication of UIPL No. 16-20, Change 5 on February 25, 2021, all COVID-19 related reasons apply retroactively to the beginning of the PUA program. Additionally, as described in Section 4.b.i. of UIPL No. 16-20, Change 5, paraphrasing of the COVID-19 related reasons is not permissible; individuals must be permitted to select more than one COVID-19 related reason; individuals must be permitted to select different COVID-19 related reasons each week; and individuals must be permitted to file and select no COVID-19 related reasons. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: CLA noted that an ineligible claimant received PUA unemployment benefits. The Department of Labor and Workforce Development (Department) did not maintain an effective control environment over eligibility requirements of the New Jersey Local Office Online Payment System (NJLOOPS) for PUA. Context: 1 of 5 claimants receiving PUA did not identify a COVID-19 reason for their unemployment and was ineligible for the program. Questioned costs: $365 Cause: The Department began providing benefits to the claimant before NJLOOPS had completed the eligibility determination process. Effect: An ineligible claimant received unemployment compensation benefits. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that only eligible claimants receive unemployment compensation benefits. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) has reviewed the controls in place for the Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation (FPUC) programs that expired with payments for CWE 9/4/21. The system controls in place for FPUC continues to require that an underlying UI/PUA payment must first be issued before any FPUC payment could be generated. Similar controls were in place for any PUA payments, where claimants have to choose a valid pandemic related reason for being unemployed before any PUA payment could be issued. These controls, before any CARES Act related payment could be issued, were in place for the duration of the CARES Act program. No PUA or FPUC payment should be issued without these requirements being met. We will continue to enforce these controls.
Reference Number: 2024-002 Prior Year Finding: 2023-001 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: 24A55UI000025 (10/1/2023-12/31/2026) UI-39337-23-55-A-34 (10/1/2022-12/31/2025) Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Pandemic Unemployment Assistance (PUA) – PUA provides benefits to covered individuals, who are those individuals not eligible for regular unemployment compensation (UC or extended benefits under state or federal law or Pandemic Emergency Unemployment Compensation (PEUC), including those who have exhausted all rights to such benefits. Covered individuals also include self-employed, those seeking part-time employment, individuals lacking sufficient work history, and those who otherwise do not qualify for regular unemployment compensation or extended benefits under state or federal law or PEUC. PUA is payable to individuals who are ineligible for regular UC, and are unemployed, partially unemployed, or unable or unavailable to work due to one of the COVID-19 related reasons identified Attachment I to UIPL No. 16-20, Change 5. Section 2102(a)(3)(A)(ii)(I) of the CARES Act included 10 specific COVID-19 related reasons. The Department, under the authority provided by Section 2102(a)(3)(A)(ii)(I)(kk) of the CARES Act, has added additional COVID-19 related reasons; these are discussed in more detail in Section 4.a. of UIPL No. 16-20, Change 5. While three of these new COVID-19 related reasons were introduced to states with the publication of UIPL No. 16-20, Change 5 on February 25, 2021, all COVID-19 related reasons apply retroactively to the beginning of the PUA program. Additionally, as described in Section 4.b.i. of UIPL No. 16-20, Change 5, paraphrasing of the COVID-19 related reasons is not permissible; individuals must be permitted to select more than one COVID-19 related reason; individuals must be permitted to select different COVID-19 related reasons each week; and individuals must be permitted to file and select no COVID-19 related reasons. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: CLA noted that an ineligible claimant received PUA unemployment benefits. The Department of Labor and Workforce Development (Department) did not maintain an effective control environment over eligibility requirements of the New Jersey Local Office Online Payment System (NJLOOPS) for PUA. Context: 1 of 5 claimants receiving PUA did not identify a COVID-19 reason for their unemployment and was ineligible for the program. Questioned costs: $365 Cause: The Department began providing benefits to the claimant before NJLOOPS had completed the eligibility determination process. Effect: An ineligible claimant received unemployment compensation benefits. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that only eligible claimants receive unemployment compensation benefits. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) has reviewed the controls in place for the Pandemic Unemployment Assistance (PUA) and Federal Pandemic Unemployment Compensation (FPUC) programs that expired with payments for CWE 9/4/21. The system controls in place for FPUC continues to require that an underlying UI/PUA payment must first be issued before any FPUC payment could be generated. Similar controls were in place for any PUA payments, where claimants have to choose a valid pandemic related reason for being unemployed before any PUA payment could be issued. These controls, before any CARES Act related payment could be issued, were in place for the duration of the CARES Act program. No PUA or FPUC payment should be issued without these requirements being met. We will continue to enforce these controls.
Reference Number: 2024-003 Prior Year Finding: 2023-002 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI-35663-21-55-A-34 (10/1/2020 – 12/31/2023), UI-37994-22-60-A-34 (10/1/2020 – 9/30/2023), UI-37238-22-55-A-34 (10/1/21 – 12/31/24), UI-39337-23-55-A-34 (10/1/2022 – 12/31/2025), 24A55UI000025-01 (10/1/2023 – 12/31/2026), 23A60UR000027 (1/1/2023 – 9/30/2024), 23A55UB000007 (3/1/2023 – 6/1/2025) Compliance Requirement: Special Tests and Provisions: UI Reemployment Programs: RESEA Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 42 U.S. Code § 506 (a) The Secretary of Labor (in this section referred to as the “Secretary”) shall award grants under this section for a fiscal year to eligible States to conduct a program of reemployment services and eligibility assessments for individuals referred to reemployment services as described in section 503(j) of this title for weeks in such fiscal year for which such individuals receive unemployment compensation. Further, per 42 U.S. Code § 506 (c) (1), In carrying out a State program of reemployment services and eligibility assessments using grant funds awarded to the State under this section, a State shall use such funds only for interventions demonstrated to reduce the number of weeks for which program participants receive unemployment compensation by improving employment outcomes for program participants. The UI program serves as one of the principal “gateways” to the workforce system. It is often the first workforce program accessed by individuals who need workforce services. The WPRS and RESEA programs serve as UI’s primary programs that facilitate the reemployment needs of UI claimants. WPRS, which is mandated by Section 303(j) of the Social Security Act, is designed to identify UI claimants who are most likely to exhaust their benefits and need reemployment assistance to return to work, and refer them to appropriate reemployment services, such as: job search and job placement assistance; counseling; testing; provision of occupational and labor market information; and assessments. WPRS provides reemployment services to selected claimants through an early intervention process. The number of individuals served under WPRS is determined by the state (and/or local areas) based on its capacity to serve these individuals. UIPL No. 41-94 provides guidance on WPRS requirements. RESEA is authorized by Section 306 of the Social Security Act and builds on the success of RESEA’s predecessor, the former UI Reemployment and Eligibility Assessment (REA) program. RESEA uses an evidence-based integrated approach that combines an eligibility assessment for continuing UI eligibility and the provision of reemployment services. State administration of the RESEA is voluntary and under certain circumstances may be designed to also satisfy WPRS requirements. Operating guidance for the RESEA program is updated annually. UIPL 10-22 provides RESEA operating Guidance for FY 2022. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) did not retain documentation required by the RESEA program to verify compliance with federal program regulations. Controls were not working sufficiently to document that claimants completed all required RESEA forms, nor that a staff member at the Department with knowledge of the program reviewed eligibility requirements prior to admission of participants to the RESEA program. Context: The Department’s policy is that RESEA eligibility interviews must be conducted and eligibility review forms completed. Both steps are to be reviewed and signed by the participant and an Unemployment Insurance (UI) staff member who is knowledgeable of the program requirements. Sixty cases were selected for testing and the following exceptions were noted: • For 5 of 60 cases selected for testing, the Department was unable to provide a signed RESEA worksheet indicating the interview had been completed and the claimant was reviewed and approved by a UI supervisor. • For 2 of 60 cases selected for testing, the claimant did not complete all required RESEA forms. Questioned costs: Undetermined. Cause: The Department’s procedures and internal controls are not sufficient to ensure compliance with RESEA requirements. Effect: Without clear documentation supporting a participant’s eligibility and supervisory review, ineligible participants could go undetected and federal funds could be paid to recipients who do not qualify to participate in the RESEA program. Recommendation: We recommend that policies and procedures be implemented to ensure that internal controls over RESEA include retention of documentation of each participant’s eligibility and review and approval by a UI supervisor. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) has policies and procedures in place that ensure that internal controls over RESEA include retention of documentation of each participant’s eligibility. All required Reemployment Services and Eligibility Assessment (RESEA) forms are collected from the participant and reviewed to determine UI eligibility by staff that are trained in RESEA and UI policy. Staff are required to upload all participant documentation into our online case management system where the information is available to staff indefinitely. DLWD will continue to provide training to staff to ensure that all participants are provided services in a timely manner and that all documentation is uploaded into our case management system. Corrective actions will be fully implemented as of June 30, 2025.
Reference Number: 2024-003 Prior Year Finding: 2023-002 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI-35663-21-55-A-34 (10/1/2020 – 12/31/2023), UI-37994-22-60-A-34 (10/1/2020 – 9/30/2023), UI-37238-22-55-A-34 (10/1/21 – 12/31/24), UI-39337-23-55-A-34 (10/1/2022 – 12/31/2025), 24A55UI000025-01 (10/1/2023 – 12/31/2026), 23A60UR000027 (1/1/2023 – 9/30/2024), 23A55UB000007 (3/1/2023 – 6/1/2025) Compliance Requirement: Special Tests and Provisions: UI Reemployment Programs: RESEA Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 42 U.S. Code § 506 (a) The Secretary of Labor (in this section referred to as the “Secretary”) shall award grants under this section for a fiscal year to eligible States to conduct a program of reemployment services and eligibility assessments for individuals referred to reemployment services as described in section 503(j) of this title for weeks in such fiscal year for which such individuals receive unemployment compensation. Further, per 42 U.S. Code § 506 (c) (1), In carrying out a State program of reemployment services and eligibility assessments using grant funds awarded to the State under this section, a State shall use such funds only for interventions demonstrated to reduce the number of weeks for which program participants receive unemployment compensation by improving employment outcomes for program participants. The UI program serves as one of the principal “gateways” to the workforce system. It is often the first workforce program accessed by individuals who need workforce services. The WPRS and RESEA programs serve as UI’s primary programs that facilitate the reemployment needs of UI claimants. WPRS, which is mandated by Section 303(j) of the Social Security Act, is designed to identify UI claimants who are most likely to exhaust their benefits and need reemployment assistance to return to work, and refer them to appropriate reemployment services, such as: job search and job placement assistance; counseling; testing; provision of occupational and labor market information; and assessments. WPRS provides reemployment services to selected claimants through an early intervention process. The number of individuals served under WPRS is determined by the state (and/or local areas) based on its capacity to serve these individuals. UIPL No. 41-94 provides guidance on WPRS requirements. RESEA is authorized by Section 306 of the Social Security Act and builds on the success of RESEA’s predecessor, the former UI Reemployment and Eligibility Assessment (REA) program. RESEA uses an evidence-based integrated approach that combines an eligibility assessment for continuing UI eligibility and the provision of reemployment services. State administration of the RESEA is voluntary and under certain circumstances may be designed to also satisfy WPRS requirements. Operating guidance for the RESEA program is updated annually. UIPL 10-22 provides RESEA operating Guidance for FY 2022. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) did not retain documentation required by the RESEA program to verify compliance with federal program regulations. Controls were not working sufficiently to document that claimants completed all required RESEA forms, nor that a staff member at the Department with knowledge of the program reviewed eligibility requirements prior to admission of participants to the RESEA program. Context: The Department’s policy is that RESEA eligibility interviews must be conducted and eligibility review forms completed. Both steps are to be reviewed and signed by the participant and an Unemployment Insurance (UI) staff member who is knowledgeable of the program requirements. Sixty cases were selected for testing and the following exceptions were noted: • For 5 of 60 cases selected for testing, the Department was unable to provide a signed RESEA worksheet indicating the interview had been completed and the claimant was reviewed and approved by a UI supervisor. • For 2 of 60 cases selected for testing, the claimant did not complete all required RESEA forms. Questioned costs: Undetermined. Cause: The Department’s procedures and internal controls are not sufficient to ensure compliance with RESEA requirements. Effect: Without clear documentation supporting a participant’s eligibility and supervisory review, ineligible participants could go undetected and federal funds could be paid to recipients who do not qualify to participate in the RESEA program. Recommendation: We recommend that policies and procedures be implemented to ensure that internal controls over RESEA include retention of documentation of each participant’s eligibility and review and approval by a UI supervisor. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) has policies and procedures in place that ensure that internal controls over RESEA include retention of documentation of each participant’s eligibility. All required Reemployment Services and Eligibility Assessment (RESEA) forms are collected from the participant and reviewed to determine UI eligibility by staff that are trained in RESEA and UI policy. Staff are required to upload all participant documentation into our online case management system where the information is available to staff indefinitely. DLWD will continue to provide training to staff to ensure that all participants are provided services in a timely manner and that all documentation is uploaded into our case management system. Corrective actions will be fully implemented as of June 30, 2025.
Reference Number: 2024-004 Prior Year Finding: 2023-004 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI-35663-21-55-A-34 (10/1/2020 – 12/31/2023), UI-37994-22-60-A-34 (10/1/2020 – 9/30/2023), UI-37238-22-55-A-34 (10/1/21 – 12/31/24), UI-39337-23-55-A-34 (10/1/2022 – 12/31/2025), 24A55UI000025-01 (10/1/2023 – 12/31/2026), 23A60UR000027 (1/1/2023 – 9/30/2024), 23A55UB000007 (3/1/2023 – 6/1/2025) Compliance Requirement: Reporting – ETA 9050 and ETA 9052 Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The ETA 9050 – Time Lapse of All First Payments except Workshare report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. First Payments are considered timely at 14/21 days, Interstate and Intrastate UI, UCFE, and UCX, full and partial weeks. The report is due in the ETA National Office on the 20th of the month following the month to which the data relates. The ETA 9052 – Nonmonetary Determination Time Lapse Detection report contains monthly information on the time it take states to issue nonmonetary determinations from the date the issues are first detected by the agency. Single-claimant and multi-claimant nonmonetary determinations are included in the report. Nonmonetary determinations made by organizational units such as Benefits Accuracy Measurement (BAM) and Benefit Payment Control (BPC) are also included in the report. Nonmonetary determinations are considered timely if completed within 21 days. The report is due in the ETA National Office on the 20th of the month following the month to which the data relates. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Reports submitted by the Department of Labor and Workforce Development (Department) indicate that First Payment Time Lapse and Nonmonetary Determinations were untimely during FY 2024. Context: Four ETA 9050 and four ETA 9052 reports were selected for testing for the months of October 2023, December 2023, March 2024 and June 2024. We noted the following exceptions: • ETA 9050: 4 of 4 reports indicate that First Payments were made in more than 14/21 days. • ETA 9052: 4 of 4 reports indicate that nonmonetary determinations were completed in more than 21 days. Questioned costs: None noted. Cause: The Department’s procedures and controls were not operating effectively to ensure that first payments and nonmonetary determinations were completed timely. Effect: First Payments and Nonmonetary Determinations were not completed timely as required by the program. Recommendation: We recommend that the Department review its policies and procedures to ensure that it makes first payments within 14/21 days and that nonmonetary determinations are completed within 21 days per program requirements. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) continues to monitor workloads for both first payment and non-monetary time lapse measurements. Identity verification remains an issue with a segment of the claim population, and delays with claimants completing their ID verification has a direct bearing on first payment and non-monetary time lapse. DLWD will continue to work on improving communications around the importance of timely verifying ID and provide assistance to claimants that may be struggling with this process. DLWD has been working with USDOL to expand identity verification options and expects the new process to be in full production by June 30, 2025. It will allow claimants to report to any USPS Post Office for an in-person ID verification. This additional in-person option to complete ID verification provides greater flexibility for claimants to complete this requirement, especially those that struggle with the digital verification process that DLWD currently uses. We expect the new process to have a positive impact on time lapse scores and overall improvement for these metrics. Most recent time lapse figures showed that for the period November 2024 through February 2025, combined non-monetary time lapse exceeded the 80% ALP for each month.
Reference Number: 2024-004 Prior Year Finding: 2023-004 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI-35663-21-55-A-34 (10/1/2020 – 12/31/2023), UI-37994-22-60-A-34 (10/1/2020 – 9/30/2023), UI-37238-22-55-A-34 (10/1/21 – 12/31/24), UI-39337-23-55-A-34 (10/1/2022 – 12/31/2025), 24A55UI000025-01 (10/1/2023 – 12/31/2026), 23A60UR000027 (1/1/2023 – 9/30/2024), 23A55UB000007 (3/1/2023 – 6/1/2025) Compliance Requirement: Reporting – ETA 9050 and ETA 9052 Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: The ETA 9050 – Time Lapse of All First Payments except Workshare report contains monthly information on first payment time lapse. This report concerns the time it takes states to pay benefits to claimants for the first compensable week of unemployment. First Payments are considered timely at 14/21 days, Interstate and Intrastate UI, UCFE, and UCX, full and partial weeks. The report is due in the ETA National Office on the 20th of the month following the month to which the data relates. The ETA 9052 – Nonmonetary Determination Time Lapse Detection report contains monthly information on the time it take states to issue nonmonetary determinations from the date the issues are first detected by the agency. Single-claimant and multi-claimant nonmonetary determinations are included in the report. Nonmonetary determinations made by organizational units such as Benefits Accuracy Measurement (BAM) and Benefit Payment Control (BPC) are also included in the report. Nonmonetary determinations are considered timely if completed within 21 days. The report is due in the ETA National Office on the 20th of the month following the month to which the data relates. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Reports submitted by the Department of Labor and Workforce Development (Department) indicate that First Payment Time Lapse and Nonmonetary Determinations were untimely during FY 2024. Context: Four ETA 9050 and four ETA 9052 reports were selected for testing for the months of October 2023, December 2023, March 2024 and June 2024. We noted the following exceptions: • ETA 9050: 4 of 4 reports indicate that First Payments were made in more than 14/21 days. • ETA 9052: 4 of 4 reports indicate that nonmonetary determinations were completed in more than 21 days. Questioned costs: None noted. Cause: The Department’s procedures and controls were not operating effectively to ensure that first payments and nonmonetary determinations were completed timely. Effect: First Payments and Nonmonetary Determinations were not completed timely as required by the program. Recommendation: We recommend that the Department review its policies and procedures to ensure that it makes first payments within 14/21 days and that nonmonetary determinations are completed within 21 days per program requirements. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) continues to monitor workloads for both first payment and non-monetary time lapse measurements. Identity verification remains an issue with a segment of the claim population, and delays with claimants completing their ID verification has a direct bearing on first payment and non-monetary time lapse. DLWD will continue to work on improving communications around the importance of timely verifying ID and provide assistance to claimants that may be struggling with this process. DLWD has been working with USDOL to expand identity verification options and expects the new process to be in full production by June 30, 2025. It will allow claimants to report to any USPS Post Office for an in-person ID verification. This additional in-person option to complete ID verification provides greater flexibility for claimants to complete this requirement, especially those that struggle with the digital verification process that DLWD currently uses. We expect the new process to have a positive impact on time lapse scores and overall improvement for these metrics. Most recent time lapse figures showed that for the period November 2024 through February 2025, combined non-monetary time lapse exceeded the 80% ALP for each month.
Reference Number: 2024-005 Prior Year Finding: 2023-006 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-34783-20-55-A-34 (7/1/2021 – 6/30/2024), AA-36334-21-55-A-34 (7/1/2021 – 6/30/2024), AA-38544-22-55-A-34 (7/1/2022 – 6/30/2025), 23A55AY000022 (7/1/2023 – 6/30/2026), 23A55AT000047 (7/1/2023 – 6/30/2026), 23A55AW000045 (7/1/2023 – 6/30/2026) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor and Workforce Development (Department) did not report subaward information timely to FSRS. Context: Seven of eight subawards selected for testing were not reported timely to FSRS. We noted the following exceptions: • 4 of 8 subawards tested were issued on 7/1/2022 and were not reported to FSRS until 3/1/2023, or 182 days late. • 3 of 8 subawards tested were issued on 7/1/2023 and were not reported to FSRS until 11/9/2023, or 70 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s internal controls were not sufficient to ensure that subawards were reported timely to FSRS. The Department had not fully implemented its corrective action plan from the prior year. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its prior year corrective action plan. It should develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) transitioned from a manual contract agreement process to a web-based grant administration system that employs the System for Administering Grants Electronically (SAGE) and IntelliGrants (IGX) applications. The DLWD FFATA Reporting Unit has access to these automated systems and monitors them monthly to identify when new Subaward contracts/agreements are approved to report the required data in the FFATA system. DLWD corrective actions regarding FFATA reporting were fully implemented as of June 30, 2024.
Reference Number: 2024-005 Prior Year Finding: 2023-006 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-34783-20-55-A-34 (7/1/2021 – 6/30/2024), AA-36334-21-55-A-34 (7/1/2021 – 6/30/2024), AA-38544-22-55-A-34 (7/1/2022 – 6/30/2025), 23A55AY000022 (7/1/2023 – 6/30/2026), 23A55AT000047 (7/1/2023 – 6/30/2026), 23A55AW000045 (7/1/2023 – 6/30/2026) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor and Workforce Development (Department) did not report subaward information timely to FSRS. Context: Seven of eight subawards selected for testing were not reported timely to FSRS. We noted the following exceptions: • 4 of 8 subawards tested were issued on 7/1/2022 and were not reported to FSRS until 3/1/2023, or 182 days late. • 3 of 8 subawards tested were issued on 7/1/2023 and were not reported to FSRS until 11/9/2023, or 70 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s internal controls were not sufficient to ensure that subawards were reported timely to FSRS. The Department had not fully implemented its corrective action plan from the prior year. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its prior year corrective action plan. It should develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) transitioned from a manual contract agreement process to a web-based grant administration system that employs the System for Administering Grants Electronically (SAGE) and IntelliGrants (IGX) applications. The DLWD FFATA Reporting Unit has access to these automated systems and monitors them monthly to identify when new Subaward contracts/agreements are approved to report the required data in the FFATA system. DLWD corrective actions regarding FFATA reporting were fully implemented as of June 30, 2024.
Reference Number: 2024-005 Prior Year Finding: 2023-006 Federal Agency: U.S. Department of Labor State Agency: Department of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: AA-34783-20-55-A-34 (7/1/2021 – 6/30/2024), AA-36334-21-55-A-34 (7/1/2021 – 6/30/2024), AA-38544-22-55-A-34 (7/1/2022 – 6/30/2025), 23A55AY000022 (7/1/2023 – 6/30/2026), 23A55AT000047 (7/1/2023 – 6/30/2026), 23A55AW000045 (7/1/2023 – 6/30/2026) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor and Workforce Development (Department) did not report subaward information timely to FSRS. Context: Seven of eight subawards selected for testing were not reported timely to FSRS. We noted the following exceptions: • 4 of 8 subawards tested were issued on 7/1/2022 and were not reported to FSRS until 3/1/2023, or 182 days late. • 3 of 8 subawards tested were issued on 7/1/2023 and were not reported to FSRS until 11/9/2023, or 70 days late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s internal controls were not sufficient to ensure that subawards were reported timely to FSRS. The Department had not fully implemented its corrective action plan from the prior year. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its prior year corrective action plan. It should develop internal controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The New Jersey Department of Labor and Workforce Development (DLWD) transitioned from a manual contract agreement process to a web-based grant administration system that employs the System for Administering Grants Electronically (SAGE) and IntelliGrants (IGX) applications. The DLWD FFATA Reporting Unit has access to these automated systems and monitors them monthly to identify when new Subaward contracts/agreements are approved to report the required data in the FFATA system. DLWD corrective actions regarding FFATA reporting were fully implemented as of June 30, 2024.
Reference Number: 2024-006 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Award Number and Year: 2023-2024 Compliance Requirement: Special Tests and Provisions – Utilities Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Recipients are required to develop policies and procedures pertaining to the use, accommodation and/or relocation of public and private utility facilities on highway rights-of way using federal highway funds. Recipients are required to develop, maintain, and obtain Federal Highway Administration (FHWA) approval of their Utility Accommodation Policy (UAP) (23 CFR section 645.215). Expenses incurred for relocating utility facilities necessitated by highway construction projects using federal highway program funds are eligible for reimbursement from FHWA provided these costs were incurred in a manner consistent with state laws or FHWA regulations, whichever is more restrictive (23 CFR section 645.103(d)). Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) did not have an FHWA-approved Utility Accommodation Policy (UAP) in FY2024. Context: The Department’s UAP was not approved by FHWA. Questioned costs: Undetermined. Cause: The Department’s procedures and internal controls were not sufficient to ensure that it submitted its UAP to FHWA for approval, and that it was operating the program under an approved plan. Effect: The Department was not operating the program under an approved UAP. Recommendation: The Department should review and enhance internal controls and procedures to ensure that it submits its UAP to FHWA for approval on a timely basis and that it operates its program under a Federally approved UAP. Views of responsible officials: The New Jersey Department of Transportation (NJDOT) has finalized its Utility Accommodation Policy (UAP) to align with federal requirements. The UAP follows the formal state regulatory process, and it was re-adopted on June 6, 2023, with technical changes. The UAP remains to be in full form and effect. In compliance with the federal rules, the UAP is being amended to incorporate provisions for Broadband and Telecommunications and Video Surveillance. The amended language has been reviewed and approved by Federal Highway Administration (FHWA). The UAP is progressing through the formal regulatory process. The policy is expected to be published on April 7, 2025. A 60-day public comment period will follow, allowing stakeholders to provide feedback. Once the public comment period is completed, the revised UAP will be implemented immediately to ensure compliance. The DOT will continue to monitor the implementation and ensure that all utility accommodation actions align with the newly approved policy.
Reference Number: 2024-006 Prior Year Finding: No Federal Agency: U.S. Department of Transportation State Agency: Department of Transportation Federal Program: Highway Planning and Construction Assistance Listing Number: 20.205 Award Number and Year: 2023-2024 Compliance Requirement: Special Tests and Provisions – Utilities Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Recipients are required to develop policies and procedures pertaining to the use, accommodation and/or relocation of public and private utility facilities on highway rights-of way using federal highway funds. Recipients are required to develop, maintain, and obtain Federal Highway Administration (FHWA) approval of their Utility Accommodation Policy (UAP) (23 CFR section 645.215). Expenses incurred for relocating utility facilities necessitated by highway construction projects using federal highway program funds are eligible for reimbursement from FHWA provided these costs were incurred in a manner consistent with state laws or FHWA regulations, whichever is more restrictive (23 CFR section 645.103(d)). Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Transportation (Department) did not have an FHWA-approved Utility Accommodation Policy (UAP) in FY2024. Context: The Department’s UAP was not approved by FHWA. Questioned costs: Undetermined. Cause: The Department’s procedures and internal controls were not sufficient to ensure that it submitted its UAP to FHWA for approval, and that it was operating the program under an approved plan. Effect: The Department was not operating the program under an approved UAP. Recommendation: The Department should review and enhance internal controls and procedures to ensure that it submits its UAP to FHWA for approval on a timely basis and that it operates its program under a Federally approved UAP. Views of responsible officials: The New Jersey Department of Transportation (NJDOT) has finalized its Utility Accommodation Policy (UAP) to align with federal requirements. The UAP follows the formal state regulatory process, and it was re-adopted on June 6, 2023, with technical changes. The UAP remains to be in full form and effect. In compliance with the federal rules, the UAP is being amended to incorporate provisions for Broadband and Telecommunications and Video Surveillance. The amended language has been reviewed and approved by Federal Highway Administration (FHWA). The UAP is progressing through the formal regulatory process. The policy is expected to be published on April 7, 2025. A 60-day public comment period will follow, allowing stakeholders to provide feedback. Once the public comment period is completed, the revised UAP will be implemented immediately to ensure compliance. The DOT will continue to monitor the implementation and ensure that all utility accommodation actions align with the newly approved policy.
Reference Number: 2024-007 Prior Year Finding: No Federal Agency: U.S. Department of the Treasury State Agency: Department of Community Affairs Federal Program: COVID-19 – Coronavirus Capital Projects Fund Assistance Listing Number: 21.029 Award Number and Year: CPFFN0185 (2021) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Community Affairs (Department) did not report subaward information to FSRS. Context: Two of two subawards were not reported to FSRS until after they were selected by auditors for testing. The subawards were issued in April 2024 but were not reported to FSRS until December 2024 which was after they were selected for testing. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department does not have procedures and internal controls to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop procedures and internal controls to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The New Jersey Department of Community Affairs (DCA) recognizes the need to strengthen its monitoring of Subaward reporting requirements to ensure timely reporting. To address this, the agency is already in the process of updating its policies and procedures to enhance oversight and compliance. As part of the policy updates, the DCA is assigning designated staff to track Subaward issuance and reporting. This ensures clear accountability and improves oversight of reporting requirements. The DCA is working to integrate automated reminders and alerts into its process to notify designated staff of upcoming Subaward reporting deadlines. This proactive approach minimizes the risk of missed reporting obligations. The DCA is working to establish a process for conducting periodic compliance reviews to assess adherence to FFATA Subaward reporting requirements. This review will help identify potential issues early and allow for timely corrective actions. To reinforce FFATA compliance, the DCA is working to implement a training initiative to ensure designated staff are knowledgeable about FFATA requirements and the importance of timely reporting. Regular communication efforts will further promote awareness and adherence to reporting deadlines.
Reference Number: 2024-008 Prior Year Finding: 2023-012 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJCMC6 (4/1/2021 – 9/30/2024) 2201NJOANS (10/1/2021 – 9/30/2023) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021 – 9/30/2023) 2201NJOAPH (10/1/2021 – 9/30/2023) 2201NJOAFC (10/1/2021 – 9/30/2023) 2301NJOASS (10/1/2022 – 9/30/2024) 2401NJOACM (10/1/2023 – 9/30/2025) 2301NJOAHD (10/1/2022 – 9/30/2024) 2401NJOASS (10/1/2023 – 9/309/2025) 2301NJOANS (10/1/2022 – 9/30/2024) 2401NJOANS (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Section III – Federal Award Findings and Questioned Costs (Continued) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS timely. Context: Zero of thirty-six subawards selected for testing were reported to FSRS timely. The subawards were issued in May 2024 and were not reported to FSRS until October 2024, or three months late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s procedures were not sufficient to ensure that subaward information was reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department enhance its controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Division of Aging Services (DoAS) hired a fiscal staff member in June of 2024. Responsibilities include the timely and accurate submission of FFATA reports. We are confident that with the additional staff we will be able to comply with managing FFATA reporting requirements and timely submissions.
Reference Number: 2024-008 Prior Year Finding: 2023-012 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJCMC6 (4/1/2021 – 9/30/2024) 2201NJOANS (10/1/2021 – 9/30/2023) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021 – 9/30/2023) 2201NJOAPH (10/1/2021 – 9/30/2023) 2201NJOAFC (10/1/2021 – 9/30/2023) 2301NJOASS (10/1/2022 – 9/30/2024) 2401NJOACM (10/1/2023 – 9/30/2025) 2301NJOAHD (10/1/2022 – 9/30/2024) 2401NJOASS (10/1/2023 – 9/309/2025) 2301NJOANS (10/1/2022 – 9/30/2024) 2401NJOANS (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Section III – Federal Award Findings and Questioned Costs (Continued) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS timely. Context: Zero of thirty-six subawards selected for testing were reported to FSRS timely. The subawards were issued in May 2024 and were not reported to FSRS until October 2024, or three months late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s procedures were not sufficient to ensure that subaward information was reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department enhance its controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Division of Aging Services (DoAS) hired a fiscal staff member in June of 2024. Responsibilities include the timely and accurate submission of FFATA reports. We are confident that with the additional staff we will be able to comply with managing FFATA reporting requirements and timely submissions.
Reference Number: 2024-008 Prior Year Finding: 2023-012 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJCMC6 (4/1/2021 – 9/30/2024) 2201NJOANS (10/1/2021 – 9/30/2023) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021 – 9/30/2023) 2201NJOAPH (10/1/2021 – 9/30/2023) 2201NJOAFC (10/1/2021 – 9/30/2023) 2301NJOASS (10/1/2022 – 9/30/2024) 2401NJOACM (10/1/2023 – 9/30/2025) 2301NJOAHD (10/1/2022 – 9/30/2024) 2401NJOASS (10/1/2023 – 9/309/2025) 2301NJOANS (10/1/2022 – 9/30/2024) 2401NJOANS (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Section III – Federal Award Findings and Questioned Costs (Continued) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS timely. Context: Zero of thirty-six subawards selected for testing were reported to FSRS timely. The subawards were issued in May 2024 and were not reported to FSRS until October 2024, or three months late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s procedures were not sufficient to ensure that subaward information was reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department enhance its controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Division of Aging Services (DoAS) hired a fiscal staff member in June of 2024. Responsibilities include the timely and accurate submission of FFATA reports. We are confident that with the additional staff we will be able to comply with managing FFATA reporting requirements and timely submissions.
Reference Number: 2024-008 Prior Year Finding: 2023-012 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJCMC6 (4/1/2021 – 9/30/2024) 2201NJOANS (10/1/2021 – 9/30/2023) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021 – 9/30/2023) 2201NJOAPH (10/1/2021 – 9/30/2023) 2201NJOAFC (10/1/2021 – 9/30/2023) 2301NJOASS (10/1/2022 – 9/30/2024) 2401NJOACM (10/1/2023 – 9/30/2025) 2301NJOAHD (10/1/2022 – 9/30/2024) 2401NJOASS (10/1/2023 – 9/309/2025) 2301NJOANS (10/1/2022 – 9/30/2024) 2401NJOANS (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Section III – Federal Award Findings and Questioned Costs (Continued) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS timely. Context: Zero of thirty-six subawards selected for testing were reported to FSRS timely. The subawards were issued in May 2024 and were not reported to FSRS until October 2024, or three months late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s procedures were not sufficient to ensure that subaward information was reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department enhance its controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Division of Aging Services (DoAS) hired a fiscal staff member in June of 2024. Responsibilities include the timely and accurate submission of FFATA reports. We are confident that with the additional staff we will be able to comply with managing FFATA reporting requirements and timely submissions.
Reference Number: 2024-008 Prior Year Finding: 2023-012 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Aging Cluster and COVID-19 Aging Cluster Assistance Listing Number: 93.044, 93.045, 93.053 Award Number and Year: 2101NJSSC6 (4/1/2021 – 9/30/2024) 2101NJHDC6 (4/1/2021 – 9/3/2024) 2101NJCMC6 (4/1/2021 – 9/30/2024) 2201NJOANS (10/1/2021 – 9/30/2023) 2201NJOASS (10/1/2021 – 9/30/2023) 2201NJOACM (10/1/2021 – 9/30/2023) 2201NJOAHD (10/1/2021 – 9/30/2023) 2201NJOAPH (10/1/2021 – 9/30/2023) 2201NJOAFC (10/1/2021 – 9/30/2023) 2301NJOASS (10/1/2022 – 9/30/2024) 2401NJOACM (10/1/2023 – 9/30/2025) 2301NJOAHD (10/1/2022 – 9/30/2024) 2401NJOASS (10/1/2023 – 9/309/2025) 2301NJOANS (10/1/2022 – 9/30/2024) 2401NJOANS (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Section III – Federal Award Findings and Questioned Costs (Continued) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS timely. Context: Zero of thirty-six subawards selected for testing were reported to FSRS timely. The subawards were issued in May 2024 and were not reported to FSRS until October 2024, or three months late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department’s procedures were not sufficient to ensure that subaward information was reported timely to FSRS. Internal controls did not prevent or detect the errors. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department enhance its controls and procedures to ensure that all required subawards are reported timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Division of Aging Services (DoAS) hired a fiscal staff member in June of 2024. Responsibilities include the timely and accurate submission of FFATA reports. We are confident that with the additional staff we will be able to comply with managing FFATA reporting requirements and timely submissions.
Reference Number: 2024-009 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 230INJTANF (10/1/2022 – 9/30/2023) 240INJTANF (10/1/2023-9/30/2024) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS as required by the FFATA. Context: Zero of twenty-eight subrecipients selected for testing were reported to FSRS. Total subawards tested were $156,936,574, and $0 was reported. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department did not have procedures or controls in place to ensure that subaward information was reported to FSRS as required by FFATA requirements. Effect: Subawards were not reported to FSRS. Questioned costs: None noted. Recommendation: We recommend that the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The New Jersey Department of Human Services’ Division of Family Development (DHD/DFD) acknowledges the audit finding regarding the required submission of Subaward to the FFATA Subaward Reporting System (FSRS). One of the primary factors that contributed to non-compliance was system inefficiencies in the FSRS, which led to challenges in tracking, reporting and ensuring data accuracy. With the transition of Subaward reporting from FSRS to sam.gov, the DHD/DFD expects this change to be beneficial in developing effective internal controls and procedures, addressing past compliance challenges and creating a sustainable reporting framework.
Reference Number: 2024-009 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 230INJTANF (10/1/2022 – 9/30/2023) 240INJTANF (10/1/2023-9/30/2024) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS as required by the FFATA. Context: Zero of twenty-eight subrecipients selected for testing were reported to FSRS. Total subawards tested were $156,936,574, and $0 was reported. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department did not have procedures or controls in place to ensure that subaward information was reported to FSRS as required by FFATA requirements. Effect: Subawards were not reported to FSRS. Questioned costs: None noted. Recommendation: We recommend that the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The New Jersey Department of Human Services’ Division of Family Development (DHD/DFD) acknowledges the audit finding regarding the required submission of Subaward to the FFATA Subaward Reporting System (FSRS). One of the primary factors that contributed to non-compliance was system inefficiencies in the FSRS, which led to challenges in tracking, reporting and ensuring data accuracy. With the transition of Subaward reporting from FSRS to sam.gov, the DHD/DFD expects this change to be beneficial in developing effective internal controls and procedures, addressing past compliance challenges and creating a sustainable reporting framework.
Reference Number: 2024-010 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Community Affairs Federal Program: Low-Income Home Energy Assistance Program Assistance Listing Number: 93.568 Award Number and Year: 2402NJLIEA (10/1/2023 – 9/30/2025), 2402NJLIEI (10/1/2023 – 9/30/2025) Compliance Requirement: Earmarking Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – No more than 10 percent of a state’s LIHEAP funds for a federal fiscal year may be used for planning and administrative costs, including both direct and indirect costs. This limitation applies, in the aggregate, to planning and administrative costs at both the state and subrecipient levels. This cap may not be exceeded by supplementing with other federal funds. Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Community Affairs (Department) exceeded the 10% cap on administrative funds. Context: The Department expended a total of $136,319,452 against the Fiscal Year 2024 award which included $14,016,444, or 10.28%, on planning and administration. This exceeded the 10% cap on administrative costs by $384,499. Questioned costs: Undetermined. Cause: The Department’s procedures were not sufficient to ensure that it did not exceed the 10% cap on administrative costs. Internal controls did not prevent or detect the errors. Effect: When the Department expends more on administrative costs than is allowed by the program, fewer funds are available to expend for programmatic purposes. Section III – Federal Award Findings and Questioned Costs (Continued) Recommendation: The Department should review and enhance internal controls and procedures to ensure that expenditures for planning and administration do not exceed the 10% administrative cap. Views of responsible officials: The New Jersey Department of Community Affairs (DCA) has revised its processes and procedures related to earmarked funds. Specifically, the spending plan formula has been updated to ensure that the earmark for Administration and Planning does not exceed the allowable 10% threshold. Additionally, the FY 2024 spending plan has been updated, and accounts have been reconciled to reflect the Administration and Planning earmark within the 10% threshold.
Reference Number: 2024-011 Prior Year Finding: 2023-020 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2001NJCCC3 (3/27/2020 – 9/30/2023) 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDD (10/1/2023 – 9/30/2025) 2401NJCCDF (10/1/2023 – 9/30/2025) 2401NJCCDM (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Section III – Federal Award Findings and Questioned Costs (Continued) Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $96,799,274, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department does not have procedures and controls to ensure that FFATA reporting requirements are met. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Department of Human Services’ Division of Family Development (DHS/DFD) acknowledges the audit finding regarding the required submission of Subaward to the FFATA Subaward Reporting System (FSRS). One of the primary factors that contributed to non-compliance was system inefficiencies in the FSRS, which led to challenges in tracking, reporting and ensuring data accuracy. With the transition of Subaward reporting from FSRS to sam.gov, the DHS/ DFD expects this change to be beneficial in developing effective internal controls and procedures, addressing past compliance challenges and creating a sustainable reporting framework.
Reference Number: 2024-011 Prior Year Finding: 2023-020 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2001NJCCC3 (3/27/2020 – 9/30/2023) 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDD (10/1/2023 – 9/30/2025) 2401NJCCDF (10/1/2023 – 9/30/2025) 2401NJCCDM (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Section III – Federal Award Findings and Questioned Costs (Continued) Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $96,799,274, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department does not have procedures and controls to ensure that FFATA reporting requirements are met. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Department of Human Services’ Division of Family Development (DHS/DFD) acknowledges the audit finding regarding the required submission of Subaward to the FFATA Subaward Reporting System (FSRS). One of the primary factors that contributed to non-compliance was system inefficiencies in the FSRS, which led to challenges in tracking, reporting and ensuring data accuracy. With the transition of Subaward reporting from FSRS to sam.gov, the DHS/ DFD expects this change to be beneficial in developing effective internal controls and procedures, addressing past compliance challenges and creating a sustainable reporting framework.
Reference Number: 2024-011 Prior Year Finding: 2023-020 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2001NJCCC3 (3/27/2020 – 9/30/2023) 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDD (10/1/2023 – 9/30/2025) 2401NJCCDF (10/1/2023 – 9/30/2025) 2401NJCCDM (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Section III – Federal Award Findings and Questioned Costs (Continued) Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not report subaward information to FSRS. Context: Zero of eight subawards selected for testing were reported to FSRS. Total subawards tested were $96,799,274, and $0 was reported as required by FFATA requirements. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department does not have procedures and controls to ensure that FFATA reporting requirements are met. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Department of Human Services’ Division of Family Development (DHS/DFD) acknowledges the audit finding regarding the required submission of Subaward to the FFATA Subaward Reporting System (FSRS). One of the primary factors that contributed to non-compliance was system inefficiencies in the FSRS, which led to challenges in tracking, reporting and ensuring data accuracy. With the transition of Subaward reporting from FSRS to sam.gov, the DHS/ DFD expects this change to be beneficial in developing effective internal controls and procedures, addressing past compliance challenges and creating a sustainable reporting framework.
Reference Number: 2024-012 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2001NJCCC3 (3/27/2020 – 9/30/2023) 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDD (10/1/2023 – 9/30/2025) 2401NJCCDF (10/1/2023 – 9/30/2025) 2401NJCCDM (10/1/2023 – 9/30/2025) Compliance Requirement: Special Tests and Provisions – Health and Safety Requirements Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – As part of their CCDF plans, Lead Agencies must certify that procedures are in effect (e.g., monitoring and enforcement) to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. This includes verifying and documenting that child care providers (unless they meet an exception, e.g., family members who are caregivers or individuals who object to immunization on certain grounds) serving children who receive subsidies meet requirements pertaining to health and safety. These requirements must address eleven specific areas—including first aid and CPR, safe sleeping practices, and administration of medication—and child care workers must be trained in these areas (42 USC 9858c(c)(2)(I); 45 CFR section 98.41). Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) was not in compliance with health and safety requirements for the program. Context: For 3 of 40 providers selected for testing, the annual health and safety inspection was not performed as required by program policy. Section III – Federal Award Findings and Questioned Costs (Continued) Questioned costs: Undetermined. Cause: The Department’s procedures were not effective to ensure that provider health and safety inspections were performed as required by program policy. Internal controls did not prevent or detect the errors. Effect: Failure to verify and document compliance with health and safety standards could allow ineligible providers to perform services under the program. Recommendation: The Department should review and enhance internal controls and procedures to ensure that provider health and safety inspections are performed as required by program policy. Views of responsible officials: The Department of Human Services’ Division of Family Development (DHS/DFD) acknowledges the audit finding that 3 of the 40 sampled providers had not been inspected as required by program policy. DHS/DFD contracts with the Department of Children and Families’ Office of Licensing (“OOL”) as the regulatory authority to monitor and inspect licensed centers and family child care providers. In response to this finding, OOL has implemented internal measures to ensure that monitoring occurs on an annual basis. These measure include the use of the New Jersey Child Care Information System (NJCCIS). A subsequent inspection of licensed child care centers was conducted on September 13, 2024. Regarding the two other family child care providers, the Child Care Resource and Referral (“CCR&R”) works in conjunction with OOL to track health and safety inspections. However, CCR&R did not monitor the two family child care providers in 2023. Since then, monitoring has been carried out in 2024 which included a review of the annual training requirements for these providers. To enhance compliance with inspections, CCR&R has acquired updated software to improve its monitoring capabilities. Copies of the 2024 inspection reports can be provided upon request. The DFD’s Office of Child Care will develop internal controls and procedures to ensure that inspections are performed as required by program policy.
Reference Number: 2024-012 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2001NJCCC3 (3/27/2020 – 9/30/2023) 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDD (10/1/2023 – 9/30/2025) 2401NJCCDF (10/1/2023 – 9/30/2025) 2401NJCCDM (10/1/2023 – 9/30/2025) Compliance Requirement: Special Tests and Provisions – Health and Safety Requirements Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – As part of their CCDF plans, Lead Agencies must certify that procedures are in effect (e.g., monitoring and enforcement) to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. This includes verifying and documenting that child care providers (unless they meet an exception, e.g., family members who are caregivers or individuals who object to immunization on certain grounds) serving children who receive subsidies meet requirements pertaining to health and safety. These requirements must address eleven specific areas—including first aid and CPR, safe sleeping practices, and administration of medication—and child care workers must be trained in these areas (42 USC 9858c(c)(2)(I); 45 CFR section 98.41). Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) was not in compliance with health and safety requirements for the program. Context: For 3 of 40 providers selected for testing, the annual health and safety inspection was not performed as required by program policy. Section III – Federal Award Findings and Questioned Costs (Continued) Questioned costs: Undetermined. Cause: The Department’s procedures were not effective to ensure that provider health and safety inspections were performed as required by program policy. Internal controls did not prevent or detect the errors. Effect: Failure to verify and document compliance with health and safety standards could allow ineligible providers to perform services under the program. Recommendation: The Department should review and enhance internal controls and procedures to ensure that provider health and safety inspections are performed as required by program policy. Views of responsible officials: The Department of Human Services’ Division of Family Development (DHS/DFD) acknowledges the audit finding that 3 of the 40 sampled providers had not been inspected as required by program policy. DHS/DFD contracts with the Department of Children and Families’ Office of Licensing (“OOL”) as the regulatory authority to monitor and inspect licensed centers and family child care providers. In response to this finding, OOL has implemented internal measures to ensure that monitoring occurs on an annual basis. These measure include the use of the New Jersey Child Care Information System (NJCCIS). A subsequent inspection of licensed child care centers was conducted on September 13, 2024. Regarding the two other family child care providers, the Child Care Resource and Referral (“CCR&R”) works in conjunction with OOL to track health and safety inspections. However, CCR&R did not monitor the two family child care providers in 2023. Since then, monitoring has been carried out in 2024 which included a review of the annual training requirements for these providers. To enhance compliance with inspections, CCR&R has acquired updated software to improve its monitoring capabilities. Copies of the 2024 inspection reports can be provided upon request. The DFD’s Office of Child Care will develop internal controls and procedures to ensure that inspections are performed as required by program policy.
Reference Number: 2024-012 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: CCDF Cluster, COVID-19 – CCDF Cluster Assistance Listing Number: 93.575, 93.596 Award Number and Year: 2001NJCCC3 (3/27/2020 – 9/30/2023) 2301NJCCDD (10/1/2022 – 9/30/2025) 2301NJCCDF (10/1/2022 – 9/30/2025) 2201NJCCDF (10/1/2021 – 9/30/2024) 2201NJCCDD (10/1/2021 – 9/30/2024) 2101NJCSC6 (10/1/2020 – 9/30/2023) 2101NJCDC6 (10/1/2020 – 9/30/2024) 2101NJCCDF (10/1/2020 – 9/30/2023) 2101NJCCDD (10/1/2023 – 9/30/2025) 2401NJCCDF (10/1/2023 – 9/30/2025) 2401NJCCDM (10/1/2023 – 9/30/2025) Compliance Requirement: Special Tests and Provisions – Health and Safety Requirements Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – As part of their CCDF plans, Lead Agencies must certify that procedures are in effect (e.g., monitoring and enforcement) to ensure that providers serving children who receive subsidies comply with all applicable health and safety requirements. This includes verifying and documenting that child care providers (unless they meet an exception, e.g., family members who are caregivers or individuals who object to immunization on certain grounds) serving children who receive subsidies meet requirements pertaining to health and safety. These requirements must address eleven specific areas—including first aid and CPR, safe sleeping practices, and administration of medication—and child care workers must be trained in these areas (42 USC 9858c(c)(2)(I); 45 CFR section 98.41). Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) was not in compliance with health and safety requirements for the program. Context: For 3 of 40 providers selected for testing, the annual health and safety inspection was not performed as required by program policy. Section III – Federal Award Findings and Questioned Costs (Continued) Questioned costs: Undetermined. Cause: The Department’s procedures were not effective to ensure that provider health and safety inspections were performed as required by program policy. Internal controls did not prevent or detect the errors. Effect: Failure to verify and document compliance with health and safety standards could allow ineligible providers to perform services under the program. Recommendation: The Department should review and enhance internal controls and procedures to ensure that provider health and safety inspections are performed as required by program policy. Views of responsible officials: The Department of Human Services’ Division of Family Development (DHS/DFD) acknowledges the audit finding that 3 of the 40 sampled providers had not been inspected as required by program policy. DHS/DFD contracts with the Department of Children and Families’ Office of Licensing (“OOL”) as the regulatory authority to monitor and inspect licensed centers and family child care providers. In response to this finding, OOL has implemented internal measures to ensure that monitoring occurs on an annual basis. These measure include the use of the New Jersey Child Care Information System (NJCCIS). A subsequent inspection of licensed child care centers was conducted on September 13, 2024. Regarding the two other family child care providers, the Child Care Resource and Referral (“CCR&R”) works in conjunction with OOL to track health and safety inspections. However, CCR&R did not monitor the two family child care providers in 2023. Since then, monitoring has been carried out in 2024 which included a review of the annual training requirements for these providers. To enhance compliance with inspections, CCR&R has acquired updated software to improve its monitoring capabilities. Copies of the 2024 inspection reports can be provided upon request. The DFD’s Office of Child Care will develop internal controls and procedures to ensure that inspections are performed as required by program policy.
Reference Number: 2024-013 Prior Year Finding: 2023-024 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Opioid STR Assistance Listing Number: 93.788 Award Number and Year: H79T1083317 (9/3/2020 – 9/29/2023), H79T1085743 (9/30/2022 – 9/29/2024) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not timely report subaward information to FSRS during FY 2024. Section III – Federal Award Findings and Questioned Costs (Continued) Context: Twelve subaward transactions were selected for testing during FY 2024. The twelve subawards were not reported to FSRS timely. The subawards were not reported to FSRS until January and February 2025, but the subawards were issued during August – October 2023. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department did not establish effective procedures and controls to ensure subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop internal controls and procedures to ensure that FFATA reporting requirements are met. We further recommend the Department develop controls and procedures to ensure that all required subawards are reported accurately and timely to FSRS no later than the end of the month following the month of issuance. Views of responsible officials: The Department of Human Services, Division of Mental Health and Addiction Services (DMHAS) agrees that for fiscal year 2024 it did not complete Federal Funding Accountability & Transparency Act (FFATA) uploads timely. DMHAS maintains written FFATA policies and procedures, and it is compliant with its SSA SFY 2023 Corrective Action Plan (CAP) which included a January 1, 2025 implementation date. However, DMHAS was unable to comply timely with the FFATA reporting requirements due to competing reporting requirements, in conjunction with the volume of data and effort required. In addition to the significant progress DMHAS reported in the FY 2023 CAP update provided below, DMHAS accomplished the following: On October 21, 2024, DMHAS on boarded a full-time FFATA Analyst dedicated to FFATA data collection and uploads. On October 23 and October 29, 2024, DMHAS conducted training for the FFATA analyst. On or about January 29, 2025 and February 3, 2025, in an effort to demonstrate its proficiency and show its good faith efforts to comply, DMHAS uploaded all SUPTRS SFY23 and SFY24 Test Contracts (FAIN ending 5822) for the SSA SFY 2024. On or about February 3, 2025 and February 19, 2025, in an effort to demonstrate its proficiency and show its good faith efforts to comply, DMHAS uploaded all SOR SFY23 and SFY24 (FAIN ending 5743) Test Contracts for the SSA SFY24. Thereafter, DMHAS completed the following uploads: • February 27, 2025 – SOR FAIN ending 5743 – remaining contracts (outside of the SSA24 Test group) up to the FSRS ceiling (which limits data entry to forty (40) pages and UEIs. • March 4, 2025 – SUPTRS FAIN ending 7054 – all contracts uploaded. • March 6, 2025 – SOR FAIN ending 7774 – all contracts (into FSRS prior to migration) • March 6, 2025 – SUPTRS FAIN ending 5822 - remaining contracts (outside of the SSA24 Test group) up to the FSRS ceiling (which limits data entry to forty (40) pages and UEIs. On January 22, 2025, the DMHAS Compliance Quality Assurance Specialist who helps monitor FFATA compliance completed the federal SAM.gov training. On March 5, 2025, the DMHAS FFATA Analyst completed the federal SAM.gov training. DMHAS remains committed to FFATA compliance, is prioritizing FFATA reporting, and is making a good faith effort to comply. However, DMHAS notes various federal issues outside of the State’s control that are causing delays and increasing administrative burden. More specifically, uploads that predated the conversion from FSRS to Sam.gov were limited by a system error so DMHAS was precluded from entering all contracts/UEIs. In addition, FAINs are missing from SAM.gov, thus precluding the submission of the corresponding uploads. DMHAS is documenting the upload limitations and missing FAINs, along with its continued efforts to overcome the various obstacles outside of its control.
Reference Number: 2024-014 Prior Year Finding: 2023-025 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Opioid STR Assistance Listing Number: 93.788 Award Number and Year: H79T1083317 (9/3/2020 – 9/29/2023), H79T1085743 (9/30/2022 – 9/29/2024) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not include all required information in subaward agreements. Context: For 1 of 13 subawards selected for testing, the subrecipient’s unique identifier and the Federal Award Identification Number (FAIN) were omitted from the subaward agreement. Questioned costs: None noted. Cause: The Department’s procedures were not effective to ensure that subawards were issued in compliance with Federal requirements. Internal controls did not prevent or detect the errors. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subaward agreements. Views of responsible officials: DMHAS acknowledges that the FAIN was omitted in a single notice of sub recipient award that predates the implementation date of its FY 2023 Corrective Action Plan (CAP). The award at issue relates to a “special County” add-on contract (one (1) of a total of nineteen (19)) that is tracked manually and in the DMHAS Contract Information Management System (CIMS) on which it currently relies to relay the data components required by 2 CFR 200.332. The single omission of the FAIN was due to a clerical error, whereby CIMS was not updated consistent with the manual record of the 2024 County contract renewal. DMHAS acknowledged in its FY 2023 CAP that CIMS was being replaced with SAGE in order to automate sub recipient notices, reduce administrative burden and decrease clerical errors that result from manual data entry. DMHAS notes that the original 2025 SAGE go-live date has been delayed and moved to Summer 2026. Therefore, DMHAS made improvements to CIMS (that is available to Providers). In addition to identifying the federal funding source in the program column and in the notes, CIMS now includes a federal drop down box that links the federal NOAs to the subrecipient agreement. DMHAS is compliant with its FY 2023 CAP which included a July 1, 2024 implementation date. Beginning July 1, 2024, DMHAS starting using a new Subaward template that includes the requisite data elements. DMHAS created a contract policy update and completed template trainings in-person and remotely. The DMHAS Compliance Unit audited the use of the new template to ensure Subaward include the requisite data elements.
Reference Number: 2024-015 Prior Year Finding: 2023-026 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: 6B08TI084660 (10/1/2021 – 9/30/2024), 6B08TI085822 (10/1/2022 – 9/30/2024), 1B08TI087054 (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Health (Department) did not timely report subaward information to FSRS during FY2024. Context: Twelve subaward transactions were selected for testing during FY 2024. The twelve subawards were not reported to FSRS timely. The subawards were not reported to FSRS until February 2025, but the subawards were issued during July 2022 – January 2024. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department did not establish effective procedures and controls to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop procedures and internal controls to ensure that all required subawards are reported to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The Department of Human Services, Division of Mental Health and Addiction Services (DMHAS) agrees that for fiscal year 2024 it did not complete Federal Funding Accountability & Transparency Act (FFATA) uploads timely. DMHAS maintains written FFATA policies and procedures, and it is compliant with its SSA SFY 2023 Corrective Action Plan (CAP) which included a January 1, 2025 implementation date. However, DMHAS was unable to comply timely with the FFATA reporting requirements due to competing reporting requirements, in conjunction with the volume of data and effort required. In addition to the significant progress DMHAS reported in the FY 2023 CAP update provided below, DMHAS accomplished the following: On October 21, 2024, DMHAS on boarded a full-time FFATA Analyst dedicated to FFATA data collection and uploads. On October 23 and October 29, 2024, DMHAS conducted training for the FFATA analyst. On or about January 29, 2025 and February 3, 2025, in an effort to demonstrate its proficiency and show its good faith efforts to comply, DMHAS uploaded all SUPTRS SFY23 and SFY24 Test Contracts (FAIN ending 5822) for the SSA SFY 2024. On or about February 3, 2025 and February 19, 2025, in an effort to demonstrate its proficiency and show its good faith efforts to comply, DMHAS uploaded all SOR SFY23 and SFY24 (FAIN ending 5743) Test Contracts for the SSA SFY24. Thereafter, DMHAS completed the following uploads: • February 27, 2025 – SOR FAIN ending 5743 – remaining contracts (outside of the SSA24 Test group) up to the FSRS ceiling (which limits data entry to forty (40) pages and UEIs. • March 4, 2025 – SUPTRS FAIN ending 7054 – all contracts uploaded. • March 6, 2025 – SOR FAIN ending 7774 – all contracts (into FSRS prior to migration) • March 6, 2025 – SUPTRS FAIN ending 5822 - remaining contracts (outside of the SSA24 Test group) up to the FSRS ceiling (which limits data entry to forty (40) pages and UEIs. On January 22, 2025, the DMHAS Compliance Quality Assurance Specialist who helps monitor FFATA compliance completed the federal SAM.gov training. On March 5, 2025, the DMHAS FFATA Analyst completed the federal SAM.gov training. DMHAS remains committed to FFATA compliance, is prioritizing FFATA reporting, and is making a good faith effort to comply. However, DMHAS notes various federal issues outside of the State’s control that are causing delays and increasing administrative burden. More specifically, uploads that predated the conversion from FSRS to Sam.gov were limited by a system error so DMHAS was precluded from entering all contracts/UEIs. In addition, FAINs are missing from SAM.gov, thus precluding the submission of the corresponding uploads. DMHAS is documenting the upload limitations and missing FAINs, along with its continued efforts to overcome the various obstacles outside of its control.
Reference Number: 2024-015 Prior Year Finding: 2023-026 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Block Grants for Prevention and Treatment of Substance Abuse, COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number and Year: 6B08TI084660 (10/1/2021 – 9/30/2024), 6B08TI085822 (10/1/2022 – 9/30/2024), 1B08TI087054 (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Health (Department) did not timely report subaward information to FSRS during FY2024. Context: Twelve subaward transactions were selected for testing during FY 2024. The twelve subawards were not reported to FSRS timely. The subawards were not reported to FSRS until February 2025, but the subawards were issued during July 2022 – January 2024. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department did not establish effective procedures and controls to ensure that subawards were reported to FSRS. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department develop procedures and internal controls to ensure that all required subawards are reported to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The Department of Human Services, Division of Mental Health and Addiction Services (DMHAS) agrees that for fiscal year 2024 it did not complete Federal Funding Accountability & Transparency Act (FFATA) uploads timely. DMHAS maintains written FFATA policies and procedures, and it is compliant with its SSA SFY 2023 Corrective Action Plan (CAP) which included a January 1, 2025 implementation date. However, DMHAS was unable to comply timely with the FFATA reporting requirements due to competing reporting requirements, in conjunction with the volume of data and effort required. In addition to the significant progress DMHAS reported in the FY 2023 CAP update provided below, DMHAS accomplished the following: On October 21, 2024, DMHAS on boarded a full-time FFATA Analyst dedicated to FFATA data collection and uploads. On October 23 and October 29, 2024, DMHAS conducted training for the FFATA analyst. On or about January 29, 2025 and February 3, 2025, in an effort to demonstrate its proficiency and show its good faith efforts to comply, DMHAS uploaded all SUPTRS SFY23 and SFY24 Test Contracts (FAIN ending 5822) for the SSA SFY 2024. On or about February 3, 2025 and February 19, 2025, in an effort to demonstrate its proficiency and show its good faith efforts to comply, DMHAS uploaded all SOR SFY23 and SFY24 (FAIN ending 5743) Test Contracts for the SSA SFY24. Thereafter, DMHAS completed the following uploads: • February 27, 2025 – SOR FAIN ending 5743 – remaining contracts (outside of the SSA24 Test group) up to the FSRS ceiling (which limits data entry to forty (40) pages and UEIs. • March 4, 2025 – SUPTRS FAIN ending 7054 – all contracts uploaded. • March 6, 2025 – SOR FAIN ending 7774 – all contracts (into FSRS prior to migration) • March 6, 2025 – SUPTRS FAIN ending 5822 - remaining contracts (outside of the SSA24 Test group) up to the FSRS ceiling (which limits data entry to forty (40) pages and UEIs. On January 22, 2025, the DMHAS Compliance Quality Assurance Specialist who helps monitor FFATA compliance completed the federal SAM.gov training. On March 5, 2025, the DMHAS FFATA Analyst completed the federal SAM.gov training. DMHAS remains committed to FFATA compliance, is prioritizing FFATA reporting, and is making a good faith effort to comply. However, DMHAS notes various federal issues outside of the State’s control that are causing delays and increasing administrative burden. More specifically, uploads that predated the conversion from FSRS to Sam.gov were limited by a system error so DMHAS was precluded from entering all contracts/UEIs. In addition, FAINs are missing from SAM.gov, thus precluding the submission of the corresponding uploads. DMHAS is documenting the upload limitations and missing FAINs, along with its continued efforts to overcome the various obstacles outside of its control.
Reference Number: 2024-016 Prior Year Finding: 2023-028 Federal Agency: U.S. Department of Homeland Security State Agency: Department of Law and Public Safety Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 066124021PA: 8/31/11; 066224614PA: 9/5/21; 066214597PA: 4/28/21; 066214574PA: 12/11/20; 066204488PA: 3/13/20; 066134086PA: 10/30/12 066244725PA: 8/11/2023 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Federal Award Findings and Questioned Costs (Continued) Condition: The Department of Law and Public Safety (Department) did not report subaward information timely to FSRS. Context: Sixty subawards were selected for testing and the following exceptions were noted: • 23 of 60 subawards selected for testing were not reported to FSRS as of FY2024. • 37 of 60 subawards selected for testing were not reported to FSRS on a timely basis. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department has not fully implemented its corrective action plan from the prior audit. Its procedures and internal controls are not sufficient to ensure that subawards are reported to FSRS on a timely basis. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its corrective action plan from the prior audit and ensure all subawards are reported to FSRS. It should develop procedures and internal controls to ensure that all required subawards are reported to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The Department has completed its corrective action plan from the prior audit. DLPS has been in full compliance with the FFATA reporting requirement since August 2024.
Reference Number: 2024-016 Prior Year Finding: 2023-028 Federal Agency: U.S. Department of Homeland Security State Agency: Department of Law and Public Safety Federal Program: Disaster Grants - Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 97.036 Award Number and Year: 066124021PA: 8/31/11; 066224614PA: 9/5/21; 066214597PA: 4/28/21; 066214574PA: 12/11/20; 066204488PA: 3/13/20; 066134086PA: 10/30/12 066244725PA: 8/11/2023 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Non-compliance Criteria or specific requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (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). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. The following key data elements must be reported: Subawardee Name and Unique Entity ID (UEI) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $25,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Federal Award Findings and Questioned Costs (Continued) Condition: The Department of Law and Public Safety (Department) did not report subaward information timely to FSRS. Context: Sixty subawards were selected for testing and the following exceptions were noted: • 23 of 60 subawards selected for testing were not reported to FSRS as of FY2024. • 37 of 60 subawards selected for testing were not reported to FSRS on a timely basis. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department has not fully implemented its corrective action plan from the prior audit. Its procedures and internal controls are not sufficient to ensure that subawards are reported to FSRS on a timely basis. Effect: Subawards were not reported to FSRS in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department complete implementation of its corrective action plan from the prior audit and ensure all subawards are reported to FSRS. It should develop procedures and internal controls to ensure that all required subawards are reported to FSRS no later than the end of the month following the month of issuance in accordance with FFATA reporting requirements. Views of responsible officials: The Department has completed its corrective action plan from the prior audit. DLPS has been in full compliance with the FFATA reporting requirement since August 2024.
Finding Number: 2024-001 Program: Student Financial Assistance Cluster ALN #: 84.063 and 84.268 Pass-through Entity: N/A- Direct Award Federal Agency: U.S. Department of Education Federal Award Year: July 1, 2023 through June 30, 2024 Compliance Requirement: Enrollment Reporting Type of Finding: Material Weakness and Material Noncompliance Criteria Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for accurately reporting all Campus-Level Record data elements. At a minimum, institutions are required to certify enrollment every 60 days or every other month. 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 Conditions found During our testwork over student enrollment reporting, we noted that the College did not report all changes to students’ status within the required 60 days. For 4 out of 40 students selected for enrollment reporting compliance testing, the College did not transmit the students’ status changes within the next NSLDS transmission after the school became aware of the change. The status changes for these four students were reported between 79 and 138 days after the College became aware of the students’ withdrawal. Additionally, while the College has controls in place to ensure that enrollment changes are reported within the 60 days required, the control does not ensure that the school is capturing changes for all students. Cause For one student noted above, Management communicated to us that it was an oversight as this student was already enrolled in the College’s graduate program. For the other three, Management communicated to us that transmission reports that are submitted during the summer months do not account for students who withdraw from the College at the end of the spring semester. These changes were not reported to NSLDS until the following fall semester when the student does not return. For the reasons noted above, we determined the related control in place at the College, which is supposed to address the completeness of the transmission reports, does not operate at a precise enough level to ensure that the reports include all student status changes that have occurred since the prior transmission. Proper perspective The College’s policy is to run a report from the Colleague system and submit it to NSLDS for any student status changes. Out of an initial sample of 40 students who had status changes, we identified four students’ whose status changes were not reported within 60 days. Upon further review by Management, there was a total of 65 students who withdrew or took a leave of absence after the 2024 spring semester. Of these 65 students, the College did not communicate the status change for 32 of them within the required 60 days. The status change for these 32 students, including the four noted above, were reported between 79 and 248 days after the College became aware of the students’ withdrawal or leave of absence. Possible asserted effect Untimely submission of student enrollment status information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned costs None noted. Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat finding A similar finding was not reported in the prior year. Recommendation We recommend that the College implement additional controls to ensure the completeness of the transmission reports before sending to NSLDS. Additionally, students who communicate to the University that they are withdrawing should have their status changed in the Colleague system and therefore be included on the next transmission report. View of responsible officials Between the conclusion of the spring term and the start of the fall term, the College reported summer enrollments. However, withdrawals from students who were not enrolled in summer terms were mistakenly held until the initial fall term reporting file.
Finding Number: 2024-001 Program: Student Financial Assistance Cluster ALN #: 84.063 and 84.268 Pass-through Entity: N/A- Direct Award Federal Agency: U.S. Department of Education Federal Award Year: July 1, 2023 through June 30, 2024 Compliance Requirement: Enrollment Reporting Type of Finding: Material Weakness and Material Noncompliance Criteria Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for accurately reporting all Campus-Level Record data elements. At a minimum, institutions are required to certify enrollment every 60 days or every other month. 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 Conditions found During our testwork over student enrollment reporting, we noted that the College did not report all changes to students’ status within the required 60 days. For 4 out of 40 students selected for enrollment reporting compliance testing, the College did not transmit the students’ status changes within the next NSLDS transmission after the school became aware of the change. The status changes for these four students were reported between 79 and 138 days after the College became aware of the students’ withdrawal. Additionally, while the College has controls in place to ensure that enrollment changes are reported within the 60 days required, the control does not ensure that the school is capturing changes for all students. Cause For one student noted above, Management communicated to us that it was an oversight as this student was already enrolled in the College’s graduate program. For the other three, Management communicated to us that transmission reports that are submitted during the summer months do not account for students who withdraw from the College at the end of the spring semester. These changes were not reported to NSLDS until the following fall semester when the student does not return. For the reasons noted above, we determined the related control in place at the College, which is supposed to address the completeness of the transmission reports, does not operate at a precise enough level to ensure that the reports include all student status changes that have occurred since the prior transmission. Proper perspective The College’s policy is to run a report from the Colleague system and submit it to NSLDS for any student status changes. Out of an initial sample of 40 students who had status changes, we identified four students’ whose status changes were not reported within 60 days. Upon further review by Management, there was a total of 65 students who withdrew or took a leave of absence after the 2024 spring semester. Of these 65 students, the College did not communicate the status change for 32 of them within the required 60 days. The status change for these 32 students, including the four noted above, were reported between 79 and 248 days after the College became aware of the students’ withdrawal or leave of absence. Possible asserted effect Untimely submission of student enrollment status information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned costs None noted. Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat finding A similar finding was not reported in the prior year. Recommendation We recommend that the College implement additional controls to ensure the completeness of the transmission reports before sending to NSLDS. Additionally, students who communicate to the University that they are withdrawing should have their status changed in the Colleague system and therefore be included on the next transmission report. View of responsible officials Between the conclusion of the spring term and the start of the fall term, the College reported summer enrollments. However, withdrawals from students who were not enrolled in summer terms were mistakenly held until the initial fall term reporting file.
Finding Number: 2024-002 Program: Student Financial Assistance Cluster ALN #: 84.063 and 84.268 Pass-through Entity: N/A- Direct Award Federal Agency: U.S. Department of Education Federal Award Year: July 1, 2023 through June 30, 2024 Compliance Requirement: Cash Management Type of Finding: Significant Deficiency Criteria An institution must credit a student’s account for the amount of Title IV funds the student is eligible to receive and pay the amount of any credit balances due before the institution seeks reimbursement from ED for those disbursements. The reimbursement request must include supporting documentation for the disbursements. After the reimbursement request is approved, ED initiates an electronic funds transfer to the institution’s account. Additionally, Schools participating in the Direct Loan program are required to perform monthly Direct Loan reconciliations (34 CFR 685.300(b)(5)). A school must reconcile the funds it received from G5 with actual disbursement records the school submitted to COD. Each month, COD sends the school a School Account Statement, which is ED’s official record of the school’s cash and disbursement records and identifies the difference between the net draws from G5 and the actual disbursement information reported to COD by the school. The school is required to account for any differences by reconciling ED’s records with the school’s financial and business records. Lastly, 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. Conditions found For a sample of three monthly bank reconciliations of the College’s main operating account, we noted there was no evidence of review by the Controller. Management communicated that the review of the bank reconciliation is part of the cash management process, but the Controller does not sign them. Each monthly bank reconciliation contains a ‘Prepared by’ and ‘Reviewed by’ sign-off line. For each sample, the Senior Staff Accountant signed off as the preparer, but the Controller did not sign off on the ‘Review by’ line. Cause Bank reconciliations are reviewed by the Controller, but there is no evidence that the control is properly being performed. Proper perspective The College’s policy is for the Controller to review bank reconciliations to ensure proper drawdowns are occurring. Out of a sample of three drawdowns, we noted the three bank reconciliations did not contain the Controller’s signature indicating proper review and approval. Possible asserted effect Not reviewing the bank reconciliation could cause the College to submit requests for reimbursement through the G5 system that are not complete or accurate. Questioned costs None noted. Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat finding A similar finding was not reported in the prior year. Recommendation We recommend that the College require that the Controller sign the bank reconciliation upon completing their review to signify that the reconciliation is complete and accurate. View of responsible officials The Controller was new to his position starting in December of 2023. He had reviewed all three of the bank reconciliations selected for audit review. However, he was not aware that the reconciliation actually required his signature per Emmanuel's policies and procedures to witness his review.
Finding Number: 2024-002 Program: Student Financial Assistance Cluster ALN #: 84.063 and 84.268 Pass-through Entity: N/A- Direct Award Federal Agency: U.S. Department of Education Federal Award Year: July 1, 2023 through June 30, 2024 Compliance Requirement: Cash Management Type of Finding: Significant Deficiency Criteria An institution must credit a student’s account for the amount of Title IV funds the student is eligible to receive and pay the amount of any credit balances due before the institution seeks reimbursement from ED for those disbursements. The reimbursement request must include supporting documentation for the disbursements. After the reimbursement request is approved, ED initiates an electronic funds transfer to the institution’s account. Additionally, Schools participating in the Direct Loan program are required to perform monthly Direct Loan reconciliations (34 CFR 685.300(b)(5)). A school must reconcile the funds it received from G5 with actual disbursement records the school submitted to COD. Each month, COD sends the school a School Account Statement, which is ED’s official record of the school’s cash and disbursement records and identifies the difference between the net draws from G5 and the actual disbursement information reported to COD by the school. The school is required to account for any differences by reconciling ED’s records with the school’s financial and business records. Lastly, 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. Conditions found For a sample of three monthly bank reconciliations of the College’s main operating account, we noted there was no evidence of review by the Controller. Management communicated that the review of the bank reconciliation is part of the cash management process, but the Controller does not sign them. Each monthly bank reconciliation contains a ‘Prepared by’ and ‘Reviewed by’ sign-off line. For each sample, the Senior Staff Accountant signed off as the preparer, but the Controller did not sign off on the ‘Review by’ line. Cause Bank reconciliations are reviewed by the Controller, but there is no evidence that the control is properly being performed. Proper perspective The College’s policy is for the Controller to review bank reconciliations to ensure proper drawdowns are occurring. Out of a sample of three drawdowns, we noted the three bank reconciliations did not contain the Controller’s signature indicating proper review and approval. Possible asserted effect Not reviewing the bank reconciliation could cause the College to submit requests for reimbursement through the G5 system that are not complete or accurate. Questioned costs None noted. Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat finding A similar finding was not reported in the prior year. Recommendation We recommend that the College require that the Controller sign the bank reconciliation upon completing their review to signify that the reconciliation is complete and accurate. View of responsible officials The Controller was new to his position starting in December of 2023. He had reviewed all three of the bank reconciliations selected for audit review. However, he was not aware that the reconciliation actually required his signature per Emmanuel's policies and procedures to witness his review.
FINDING 2024-002 Information on the federal program: Subject: Head Start Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH011249, 05HP000285 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the Unit to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. The Unit did not have adequate documentation to support expenditures. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $5,407 Context: During testing, we noted the following issues in a sample of sixty head start cluster account payable and payroll transactions: • The Unit paid $5,407 in sales tax on 3 selections which is an unallowable cost. The Unit is tax-exempt as a governmental entity in the state and should not pay sales tax. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2023-001. Recommendation: We recommend the Unit obtain the necessary documentation to show vendors the Unit is a tax-exempt entity. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan
FINDING 2024-002 Information on the federal program: Subject: Head Start Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH011249, 05HP000285 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness, Noncompliance Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the Unit to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. The Unit did not have adequate documentation to support expenditures. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $5,407 Context: During testing, we noted the following issues in a sample of sixty head start cluster account payable and payroll transactions: • The Unit paid $5,407 in sales tax on 3 selections which is an unallowable cost. The Unit is tax-exempt as a governmental entity in the state and should not pay sales tax. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2023-001. Recommendation: We recommend the Unit obtain the necessary documentation to show vendors the Unit is a tax-exempt entity. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan
FINDING 2024-004 Information on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH011249, 05HP000285 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the Unit in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: None. Context: We noted that for the two federal financial reports in a sample of two reports, the Supervisor prepared the report without a secondary, documented review before the submission of the report to ensure the accuracy of the report. The amounts reported agreed to the supporting records without error. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2023-003. Recommendation: We recommended that the Unit implement a documented, formal review of the reports before they are submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-004 Information on the federal program: Subject: Head Start Cluster - Internal Controls Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH011249, 05HP000285 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Condition: An effective internal control system was not in place at the Unit in order to ensure compliance with requirements related to the grant agreement and the reporting compliance requirement. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the reporting requirements. Effect: The failure to establish an effective internal control system placed the Unit at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: None. Context: We noted that for the two federal financial reports in a sample of two reports, the Supervisor prepared the report without a secondary, documented review before the submission of the report to ensure the accuracy of the report. The amounts reported agreed to the supporting records without error. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2023-003. Recommendation: We recommended that the Unit implement a documented, formal review of the reports before they are submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria: 2 CFR 200 §200.303 Internal Controls requires that the grant recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wages) by the Department of Labor. Condition: Based on our testing of the wage requirements for the ESSER program, we identified that the District did not comply with the wage rate requirements for the HVAC project in a timely manner. Cause: The District did not have proper internal controls established over wage rate compliance requirements in order to identify noncompliance in a timely manner. Effect: The lack of internal controls indicates that the District may have incurred potential noncompliance and questioned costs related to the federal awards. However, based on our testing, the District complied with the wage rate requirements but the internal controls over related compliance did not operate effectively. Repeat Finding: No. Recommendation: We recommend that the District establish internal controls over special compliance requirements and perform them in a timely manner, such as wage rage requirements, to avoid potential questioned costs and noncompliance.
Criteria: 2 CFR 200 §200.303 Internal Controls requires that the grant recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wages) by the Department of Labor. Condition: Based on our testing of the wage requirements for the ESSER program, we identified that the District did not comply with the wage rate requirements for the HVAC project in a timely manner. Cause: The District did not have proper internal controls established over wage rate compliance requirements in order to identify noncompliance in a timely manner. Effect: The lack of internal controls indicates that the District may have incurred potential noncompliance and questioned costs related to the federal awards. However, based on our testing, the District complied with the wage rate requirements but the internal controls over related compliance did not operate effectively. Repeat Finding: No. Recommendation: We recommend that the District establish internal controls over special compliance requirements and perform them in a timely manner, such as wage rage requirements, to avoid potential questioned costs and noncompliance.
Reference Number: 2024-001 Prior Year Finding: N/A Federal Agency: Pass-Through Agency: U.S. Department of Health and Human Services Maryland Department of Aging Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045 Award Number and Year: 650122/15, 650222/15 (10/1/2021-9/30/2023); 650123/15, 650223/15 (10/1/2022-9/30/2024); 650124/15, 650224/15 (10/1/2023-9/30/2025) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per Maryland Department of Aging guidance, the County is required to submit quarterly financials forms outlining grant spending progress, matching requirements, budget categories, and any other revenue sources for all open grants. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not submit required quarterly reports to the Maryland Department of Aging during FY24. Context: For seven of seven quarterly reports selected for testing, the County was unable to provide documentation that the report had been submitted during FY24. Cause: The County’s policies and procedures were not sufficient to ensure that required reports were submitted to the Maryland Department of Aging as required. Internal controls did not prevent or detect the errors. Effect: The County is not in compliance with reporting requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that quarterly reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required reports are submitted timely to the Maryland Department of Aging. Views of responsible officials: There is no disagreement with the audit finding.
Reference Number: 2024-001 Prior Year Finding: N/A Federal Agency: Pass-Through Agency: U.S. Department of Health and Human Services Maryland Department of Aging Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045 Award Number and Year: 650122/15, 650222/15 (10/1/2021-9/30/2023); 650123/15, 650223/15 (10/1/2022-9/30/2024); 650124/15, 650224/15 (10/1/2023-9/30/2025) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per Maryland Department of Aging guidance, the County is required to submit quarterly financials forms outlining grant spending progress, matching requirements, budget categories, and any other revenue sources for all open grants. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not submit required quarterly reports to the Maryland Department of Aging during FY24. Context: For seven of seven quarterly reports selected for testing, the County was unable to provide documentation that the report had been submitted during FY24. Cause: The County’s policies and procedures were not sufficient to ensure that required reports were submitted to the Maryland Department of Aging as required. Internal controls did not prevent or detect the errors. Effect: The County is not in compliance with reporting requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that quarterly reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required reports are submitted timely to the Maryland Department of Aging. Views of responsible officials: There is no disagreement with the audit finding.
Reference Number: 2024-001 Prior Year Finding: N/A Federal Agency: Pass-Through Agency: U.S. Department of Health and Human Services Maryland Department of Aging Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045 Award Number and Year: 650122/15, 650222/15 (10/1/2021-9/30/2023); 650123/15, 650223/15 (10/1/2022-9/30/2024); 650124/15, 650224/15 (10/1/2023-9/30/2025) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per Maryland Department of Aging guidance, the County is required to submit quarterly financials forms outlining grant spending progress, matching requirements, budget categories, and any other revenue sources for all open grants. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not submit required quarterly reports to the Maryland Department of Aging during FY24. Context: For seven of seven quarterly reports selected for testing, the County was unable to provide documentation that the report had been submitted during FY24. Cause: The County’s policies and procedures were not sufficient to ensure that required reports were submitted to the Maryland Department of Aging as required. Internal controls did not prevent or detect the errors. Effect: The County is not in compliance with reporting requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that quarterly reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required reports are submitted timely to the Maryland Department of Aging. Views of responsible officials: There is no disagreement with the audit finding.
Reference Number: 2024-001 Prior Year Finding: N/A Federal Agency: Pass-Through Agency: U.S. Department of Health and Human Services Maryland Department of Aging Federal Program: Aging Cluster Assistance Listing Number: 93.044, 93.045 Award Number and Year: 650122/15, 650222/15 (10/1/2021-9/30/2023); 650123/15, 650223/15 (10/1/2022-9/30/2024); 650124/15, 650224/15 (10/1/2023-9/30/2025) Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: Per Maryland Department of Aging guidance, the County is required to submit quarterly financials forms outlining grant spending progress, matching requirements, budget categories, and any other revenue sources for all open grants. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Prince George’s County (the County) did not submit required quarterly reports to the Maryland Department of Aging during FY24. Context: For seven of seven quarterly reports selected for testing, the County was unable to provide documentation that the report had been submitted during FY24. Cause: The County’s policies and procedures were not sufficient to ensure that required reports were submitted to the Maryland Department of Aging as required. Internal controls did not prevent or detect the errors. Effect: The County is not in compliance with reporting requirements. Questioned costs: None noted. Recommendation: We recommend that the County develop internal controls and procedures to ensure that quarterly reporting requirements are met. We further recommend the County develop controls and procedures to ensure that all required reports are submitted timely to the Maryland Department of Aging. Views of responsible officials: There is no disagreement with the audit finding.
FINDING 2024-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to a child receiving free or reduced-price meals. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable program. In the case of the National School Lunch Program and the School Breakfast Program, children belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at reduced price. Children who have been determined ineligible for free or reduced-price school meals pay the full price, set by the School Food Authority, for their meals. Children attending SFSP meal service sites receive their meals at no charge. As a general rule, a child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a Direct Certification, annual eligibility determinations are based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program (ALN 93.600), or, under most circumstances, the TANF program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Direct Certifications The Food Service Director (Director) downloaded the Direct Certification report from the State of Indiana database monthly and uploaded it to the school lunch point-of-sale (POS) system. However, there was no documentation that a review process took place to ensure the uploads had imported correctly and students' status was updated accordingly. Applications Eligibility for applications submitted for free and reduced lunch were determined by a Kitchen Manager or the Director manually and by the POS system based on the published income eligibility guidelines. For applications that were determined by a Kitchen Manager, the Director reviewed and redetermined eligibility. However, this review process was not consistently documented. The Director downloaded the new income eligibility guidelines that were updated in the POS system by the software vendor. The Director reviewed the accuracy of the income eligibility guidelines and then saved them to the POS system. Documentation that the review process was implemented properly could not be provided. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The system of internal controls over the monthly Direct Certification uploads, the review of the income eligibility guidelines saved in the POS system, and the manual determinations were not properly implemented. The Director did not maintain documentation that the review process had occurred. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to a child receiving free or reduced-price meals. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable program. In the case of the National School Lunch Program and the School Breakfast Program, children belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at reduced price. Children who have been determined ineligible for free or reduced-price school meals pay the full price, set by the School Food Authority, for their meals. Children attending SFSP meal service sites receive their meals at no charge. As a general rule, a child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a Direct Certification, annual eligibility determinations are based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program (ALN 93.600), or, under most circumstances, the TANF program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Direct Certifications The Food Service Director (Director) downloaded the Direct Certification report from the State of Indiana database monthly and uploaded it to the school lunch point-of-sale (POS) system. However, there was no documentation that a review process took place to ensure the uploads had imported correctly and students' status was updated accordingly. Applications Eligibility for applications submitted for free and reduced lunch were determined by a Kitchen Manager or the Director manually and by the POS system based on the published income eligibility guidelines. For applications that were determined by a Kitchen Manager, the Director reviewed and redetermined eligibility. However, this review process was not consistently documented. The Director downloaded the new income eligibility guidelines that were updated in the POS system by the software vendor. The Director reviewed the accuracy of the income eligibility guidelines and then saved them to the POS system. Documentation that the review process was implemented properly could not be provided. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The system of internal controls over the monthly Direct Certification uploads, the review of the income eligibility guidelines saved in the POS system, and the manual determinations were not properly implemented. The Director did not maintain documentation that the review process had occurred. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to a child receiving free or reduced-price meals. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable program. In the case of the National School Lunch Program and the School Breakfast Program, children belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at reduced price. Children who have been determined ineligible for free or reduced-price school meals pay the full price, set by the School Food Authority, for their meals. Children attending SFSP meal service sites receive their meals at no charge. As a general rule, a child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a Direct Certification, annual eligibility determinations are based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program (ALN 93.600), or, under most circumstances, the TANF program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Direct Certifications The Food Service Director (Director) downloaded the Direct Certification report from the State of Indiana database monthly and uploaded it to the school lunch point-of-sale (POS) system. However, there was no documentation that a review process took place to ensure the uploads had imported correctly and students' status was updated accordingly. Applications Eligibility for applications submitted for free and reduced lunch were determined by a Kitchen Manager or the Director manually and by the POS system based on the published income eligibility guidelines. For applications that were determined by a Kitchen Manager, the Director reviewed and redetermined eligibility. However, this review process was not consistently documented. The Director downloaded the new income eligibility guidelines that were updated in the POS system by the software vendor. The Director reviewed the accuracy of the income eligibility guidelines and then saved them to the POS system. Documentation that the review process was implemented properly could not be provided. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The system of internal controls over the monthly Direct Certification uploads, the review of the income eligibility guidelines saved in the POS system, and the manual determinations were not properly implemented. The Director did not maintain documentation that the review process had occurred. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Finding: Material Weakness Condition and Context The School Corporation had not properly implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to a child receiving free or reduced-price meals. INDIANA STATE BOARD OF ACCOUNTS 18 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Any child enrolled in a participating school who meets the applicable program's definition of "child," may receive meals under the applicable program. In the case of the National School Lunch Program and the School Breakfast Program, children belonging to households meeting nationwide income eligibility requirements may receive meals at no charge or at reduced price. Children who have been determined ineligible for free or reduced-price school meals pay the full price, set by the School Food Authority, for their meals. Children attending SFSP meal service sites receive their meals at no charge. As a general rule, a child's eligibility for free or reduced-price meals under a Child Nutrition Cluster program may be established by the submission of an annual application or statement which furnishes such information as family income and family size. Local educational agencies, institutions, and sponsors then determine eligibility by comparing the data reported by the child's household to published income eligibility guidelines. Additionally, a child may be direct certified. For a Direct Certification, annual eligibility determinations are based on the child's household receiving benefits under SNAP, FDPIR, the Head Start Program (ALN 93.600), or, under most circumstances, the TANF program (ALN 93.558). A household may furnish documentation of its participation in one of these programs; or the school, institution, or sponsor may obtain the information directly from the state or local agency that administers these programs. Certain foster, runaway, homeless, and migrant children are categorically eligible for free school lunches and breakfasts. Direct certified households do not need to complete an application. Direct Certifications The Food Service Director (Director) downloaded the Direct Certification report from the State of Indiana database monthly and uploaded it to the school lunch point-of-sale (POS) system. However, there was no documentation that a review process took place to ensure the uploads had imported correctly and students' status was updated accordingly. Applications Eligibility for applications submitted for free and reduced lunch were determined by a Kitchen Manager or the Director manually and by the POS system based on the published income eligibility guidelines. For applications that were determined by a Kitchen Manager, the Director reviewed and redetermined eligibility. However, this review process was not consistently documented. The Director downloaded the new income eligibility guidelines that were updated in the POS system by the software vendor. The Director reviewed the accuracy of the income eligibility guidelines and then saved them to the POS system. Documentation that the review process was implemented properly could not be provided. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 19 NORTH NEWTON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause The system of internal controls over the monthly Direct Certification uploads, the review of the income eligibility guidelines saved in the POS system, and the manual determinations were not properly implemented. The Director did not maintain documentation that the review process had occurred. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the grant agreement and the compliance requirement could result in the repayment of federal funds. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management implement a proper system of internal controls that would ensure that the appropriate reviews, approvals, and oversight are documented. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.