Finding number: 2024-011 Federal agency: U.S. Department of Education Pass-through agency: Commonwealth Department of Elementary and Secondary Education Program: Student Support and Academic Enrichment Program ALN #: 84.424 Award number: 0309-000548-2024-0035 Award year: September 12, 2023 to September 30, 2025 Finding: Internal Control and Compliance over Period of Performance Prior Year Finding: No Type of Finding: Material Weakness and Material Noncompliance Criteria Period of Performance A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308, 200.309, and 200.403(h). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15-month period of initial availability plus a 12-month period for carryover. Additionally, 2 CFR 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of period of performance associated with those expenditures charged to grant awards which began during fiscal year 2024 and cost transfers, we noted noncompliance for 2 expenditures out of a sample of 4. Per review of the underlying vendor invoices, the service period for these expenditures started prior to the award start date of September 12, 2023.Cause This appears to be due to an insufficient review of invoices to ensure the underlying services performed by vendors are within the grant awards outlined grant period. Effect Insufficient review of vendor invoices increases the risk of costs being charged to a grant award outside its approved budget period. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: $1,250,864 Recommendation We recommend that the Boston Public Schools (BPS) re-enforce its policies and procedures to ensure their review of expenditures charged to the award also includes a detailed review of the underlying vendor service period. View of Responsible Officials from the Auditee BPS will take a multi-step approach to ensuring accuracy of spending to the grant award period: 1. Reinforce our existing practice of ensuring that period of service is reflected on Purchase Orders, which it was for the PO’s in question. 2. Working with major suppliers to ensure they understand the grant funded nature of their program and the eligible dates of service, which are outlined on the Purchase Order 3. Review / Update training for our Accounts Payable team on ensuring that the period of service on an invoice matches the period of service on the Purchase Order 4. Review / Update training for our State & Federal Grants, Programs, and Compliance teams to ensure that expenses are reviewed before the end of the grant period to ensure compliance with federal regulations.
Finding number: 2024-012 Federal agency: U.S. Department of Homeland Security Pass-through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response (SAFER) ALN #: 97.083 Award number: EMW-2020-FF-00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control over Financial Reporting and Performance Reporting Prior Year Finding: Yes; 2023-015 and 2023-016 Type of Finding: Significant Deficiency Criteria Financial Reporting Per the Department of Homeland Security (DHS) Notice of Funding Opportunity (NOFO) for Fiscal Year 2020 Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program, recipients of the SAFER Program grants are required to submit an FFR (SF-425) on a semi-annual basis. The FFR is to be submitted using the online FEMA GO based on the calendar year beginning with the period after the start of the period of performance. Grant recipients are required to submit an FFR throughout the entire period of performance of the grant. Reports are due: 1. No later than July 30 (for the period January 1 – June 30) 2. No later than January 30 (for the period July 1 – December 31) 3. Within 120 days after the end of the period of performance Performance Reporting Per the Department of Homeland Security (DHS) Notice of Funding Opportunity (NOFO) for Fiscal Year 2020 Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program and the Federal Emergency Management Agency (FEMA) Grant Programs Directorate Information Bulletin No. 471, the recipient is responsible for completing and submitting a Programmatic Performance Report (PPR) using FEMA GO. For those awards which began in prior year, the PPR is due every six months based on the calendar year until the period of performance ends, and no later than 30 days after the six-month period end.Additionally, 2 CFR 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition Financial Reporting During our testing of both semi-annual Federal Financial SF-425 (SF-425) reports, we were unable to verify approval of the SF-425 for reporting period ending 12/31/2023 by the Deputy Commissioner of the Boston Fire Department prior to submission. Performance Reporting Additionally, during our testing over both required semi-annual performance progress reports (PPRs) for fiscal year 2023, we noted the semi-annual PPR covering July 1, 2023 to December 31, 2023 was filed 65 days late on April 5, 2024. Additionally, we noted the semi-annual PPR covering January 1, 2024 to June 30, 2024 was filed one day late on August 1, 2024. Cause Financial Reporting This appears to be due to lack of a formal documented review over the semi-annual SF-425 reports. Progress Reporting This appears to be due to inadequate program detail to ensure complete and accurate information for reporting at the time of the submission deadlines. Effect Financial Reporting The Boston Fire Department (BFD) does not have effective internal controls over the Federal award to ensure the completeness and accuracy of the semi-annual SF-425 Financial Report. Performance Reporting The BFD has an insufficient process in place to ensure completeness and accuracy of the period expenditures and the timely filing of the semi-annual PPRs. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs NoneRecommendation We recommend that the BFD re-enforce control procedures to ensure that the SF-425 Financial Reports formal review and approval is documented. Additionally, we recommend that the BPD implement control procedures to ensure that the PPRs are filed timely and reviewed against supporting schedules to ensure completeness and accuracy of each report prior to submission. View of Responsible Officials from the Auditee BFD has taken considerable steps to incorporate and implement proper control procedures surrounding all grant related matters, i.e. programmatic and financial reporting and oversight. In August 2023, the department hired a Financial Grants Manager with more than ten years of experience working in municipal government with grants to ensure proper financial oversight is established and enforced. In February 2024, the department hired a Programmatic Grants Manager to ensure and implement proper policies and procedures regarding programmatic aspects of the department’s external funds. The department has acquired licenses for Airtable, an online platform for creating and sharing relational databases. It combines the features of a database and a spreadsheet, allowing users to store, organize, and collaborate on information about anything. This platform allows the department to track upcoming reporting deadlines, maintain information regarding grant related purchases, etc. The Programmatic and Financial Grants Manager have been reviewing all currently funded grants, to include SAFER, to ensure that the general ledger postings accurately reflect allowable costs so that when reports are filed the information reported in FEMA GO is accurate and complete. The Department projected that timely and accurate filing will be in effect no later than in January 2025 in order to complete the semi-annual reports due for the period ending December 31, 2024. The department had a high success rate in ensuring timely completion, approval and submission of financial reports for the most recently reporting period.
FINDING 2024-002 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management 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 School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092 and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368, respectively, for the period of July 1, 2021 through June 30, 2022). We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and $255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735, respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4 employees. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. 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: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management 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 School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II and ESSER III amounts reported on the Year 2 report ($241,092 and $180,266, respectively) did not agree to the underlying expenditure records ($226,005 and $88,368, respectively, for the period of July 1, 2021 through June 30, 2022). We also noted that the ESSER II and ESSER III amounts reported on the Year 3 report ($136,199 and $255,826, respectively) did not agree to the underlying expenditure records ($170,866 and $192,735, respectively, for the period of July 1, 2021 through June 30, 2022). Additionally, the number of employees reported on the Year 4CrossAct report was overstated by 4 employees. Identification as a repeat finding: No. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had improvements at various buildings. It did not properly include Davis- Bacon wage rate requirements in the vendor contract, nor did it obtain weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. The total project cost disbursed during the audit period was $73,209 which included materials and labor. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-003 Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: 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). . . ." 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had improvements at various buildings. It did not properly include Davis- Bacon wage rate requirements in the vendor contract, nor did it obtain weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. The total project cost disbursed during the audit period was $73,209 which included materials and labor. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2024-004 Information on the federal program: Subject: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll transactions. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management ensure all timecards are formally reviewed and the School Corporation maintain the supporting documentation. 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: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll transactions. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management ensure all timecards are formally reviewed and the School Corporation maintain the supporting documentation. 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: Child Nutrition Cluster - Internal Controls Federal Agency: Department of Agriculture Federal Program: School Breakfast Program, National School Lunch Program Assistance Listing Number: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2023, FY2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles 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 School Corporation in order to ensure compliance with requirements related to the grant agreement and the eligibility compliance requirement. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles requirements. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: We noted there was no review of 4 timecards selected for testing in a sample of 40 payroll transactions. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management ensure all timecards are formally reviewed and the School Corporation maintain the supporting documentation. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding Number: 2024-001 Federal Agency: U.S. Department of Health and Human Services Pass-through Agency: State of Vermont, Division of Alcohol and Drug Abuse Program: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Award Number: 03420-09722 Award Year: 2024 Finding: Internal controls over financial reporting Prior Year Finding: N/A Type of Finding: Significant Deficiency Criteria In accordance with 2 CFR §200.303, the non-federal entity must: (1) Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2) Comply with U.S. Constitution, federal statutes, regulations, and the terms and conditions of the federal awards. (3) Evaluate and monitor the non-federal entity's compliance with statutes, regulations, and the terms and conditions of the federal awards. (4) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (5) Take reasonable measures to safeguard protected personally identifiable information and other information the federal awarding agency or pass-through entity designates as sensitive or the non-federal entity considers sensitive consistent with applicable federal, state, local, and tribal laws regarding privacy and responsibility over confidentiality. Condition Management did not have effective internal controls over financial reporting. A large number of material audit adjustments were required and ending balances were not correct. This creates a higher risk of material misstatement of federal award expenditures. Cause It appears that these were isolated incidents. The causes were due to a one-time grant transfer from another organization which created confusion and some accidental oversight. Effect Poor internal controls over financial reporting create the opportunity for fraud or abuse and can cause the financial statements or the schedule of federal expenditures to be materially misstated. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation: We recommend that the Organization implement stronger internal controls over financial reporting and to strengthen the fiscal year end accounting close process. We also recommend that the Organization adopt a formal policy for month and year end accounting. View of Responsible Officals from the Auditee: Management agrees with this finding and recommendation. The Organization is going to strenghten their internal controls in many different ways. Proper segregation of duties will be implemented for all significant accounting functions and strictly followed so that no one single individual has complete control over all aspects of a financial transaction. Clear approval processes will be established so that workflows are reviewed and approved. Finally, periodic reconciliations will be performed and documented so that ending balances are correct going forward.
Reference Number: 2024-002 – Inadequate Documentation for Participant Stipends Federal Program Title: WIOA Cluster Federal Assistance Listing Number: 17.258 Federal Agency: Department of Labor (DOL) Pass-Through Entity: State of California Employment Development Department Federal Award Number and Year: AA211079 Fiscal Year 2023-2024 Category of Finding: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance, Instance of Noncompliance Criteria Title 2 Code of Federal Regulations (2 CFR) §200.343(g) states that for costs to be allowable under federal awards, costs be adequately documented. 2 CFR §200.303 states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our audit of compliance with activities allowed or unallowed and allowable costs/cost principles, we noted that the Organization was unable to provide adequate supporting documentation (attendance sheets and/or sign in sheets with signatures) for thirty-nine (39) direct non payroll costs. Cause The Organization has experienced significant turnover in key personnel in the Organization’s finance department and management in past years. Absent robust accounting policies and procedures, when vacancies occur, information can be lost and as individuals are getting up to speed, some processes may not be fully executed if they are manual and not fully embedded into an automated system. Effect Not providing sufficient documentation to auditors to demonstrate compliance with federal compliance results in an audit scope limitation. Failure to adequately document and maintain support for expenditures results in non-compliance with 2 CFR) §200.343(g) and there is a risk that federal funds may be used for unallowable activities and/or costs. Questioned Costs Questioned costs were not determinable. Context For thirty-nine (39) out of sixty (60) direct nonpayroll costs selected for testing, the Company did not provide adequate supporting documentation (attendance sheets and/or sign in sheets with signatures). The sample was not a statistically valid sample. Recommendation We recommend that the Organization develop and document processes and procedures for participant attendance tracking and participant stipends paid. Views of Responsible Officials and Planned Corrective Action Person responsible: Leona Smith Di Faustino, Interim Executive Director Corrective Action Plan: The organization will strengthen and document a formal process for documenting attendance. This process will include provide training to employees responsible for tracking attendance, implementing a signature sheet to be submitted and reviewed by program managers after each class, and incorporate review of attendance sheets into the payment processes for participant stipend payments ensuring only participants who correctly documented attendance are able to receive the stipend funds. Anticipated Implementation Date: July 1, 2025
Criteria Title 2 Code of Federal Regulations (2 CFR) §200.303 states that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our review of participant intake forms for the WIOA programs, we noted that thirty-nine (39) forms did not contain documentation of review and approval by the Executive Director and there was no documented process for case management participant eligibility determinations. This is a repeat finding of 2023-003. Cause The Organization has experienced significant turnover in key personnel in the Organization’s finance department and management in past years. Absent robust accounting policies and procedures, when vacancies occur, information can be lost and as individuals are getting up to speed, some processes may not be fully executed if they are manual and not fully embedded into an automated system. Effect No documented review processes for participant intake forms or participant eligibility determinations are deficiencies in internal control and could result in ineligible participants being noted as eligible and included in the program. Questioned Costs Questioned costs were not identified. Context For the thirty-nine (39) participate intake forms selected for testing, all thirty-nine were missing evidence of review. The sample was not a statistically valid sample. Recommendation We recommend that the Organization develop and document review processes to ensure all participant intake forms are reviewed by a second person in addition to the case manager and that all participant eligibility determinations are reviewed. Views of Responsible Officials and Planned Corrective Action Person responsible: Leona Smith Di Faustino, Interim Executive Director Corrective Action Plan: During the period being audited internal controls for program participants documents were not reviewed by the former Executive Director. The new Executive Director has implemented a check and balance procedure that requires the Case Manager, Program Manager, and Executive Director to review and sign off on participant application forms and to be documented on the participants application before the participant can move forward in the program. Anticipated Implementation Date: July 1, 2024
Homeowner Assistance Fund—Service Organization Internal Controls Background: Under the American Rescue Plan Act (ARPA) of 2021, the U.S. Department of the Treasury (U.S. Treasury) provided funding to DOA’s Division of Energy, Housing and Community Resources (DEHCR) for the HAF program. This program was established to mitigate financial hardships associated with the public health emergency, including for the purpose of preventing homeowner mortgage delinquencies, defaults, foreclosures, losses of utilities or home energy services, and displacements of homeowners experiencing financial hardship after January 21, 2020. To administer the HAF program, DOA contracted with a service organization to host and maintain a computer system to assist in determining the eligibility of individuals applying for HAF benefits, approving these benefits, storing information on HAF applicants, and for reporting HAF activities to the federal government. During our FY 2022-23 single audit (report 24-3), we identified concerns that DOA did not have sufficient procedures in place to obtain the service organization audit report from its service organization for HAF nor to use the service organization audit report as a tool to assess the effectiveness of the internal controls for the computer system maintained by the service organization. We recommended that DOA obtain the service organization audit report for the computer system used to administer the HAF program and complete a review of this report, assess the effectiveness of the internal controls for the computer system maintained by the service organization, and review the complementary user entity controls at DOA that are required to be in place for it to rely on the service organization audit report. In addition, DOA was to document its review, and to implement user entity controls if needed (Finding 2023-101). In its response to our recommendations, and as noted in the Summary Schedule of Prior Audit Findings, DOA requested and received the service organization audit report. In addition, DOA developed procedures to: -review the service organization audit report; -assess of the effectiveness of the internal controls on the computer system maintained by the service organization; and -review the complementary user entity controls that are required to be in place for it to rely on the service organization audit report, and to implement user entity controls if needed. DOA indicated it had completed in June 2024 a preliminary review of the service organization audit report, including the opinion, testing exceptions, and complementary user-entity controls, but DOA had not completed its assessment of the effectiveness of the internal controls on the computer system maintained by the service organization nor documented its review. Criteria: Under 2 CFR s. 200.303, DOA is responsible for establishing and maintaining effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the award terms and conditions. This includes instances in which management contracts with a service organization, which is an organization that provides services to another entity and whose services are relevant to the entity’s internal controls. When using a service organization, the entity should gain assurances that the internal controls at the service organization are operating effectively because weaknesses in the service organization’s internal controls could affect the activity of the entity. Such assurances could be gained through a service organization audit, which includes a report on the service organization’s internal controls by an independent auditor. One type of audit that may be completed includes an opinion on the fairness of management’s description of the internal controls in place at the service organization, whether the auditor believes the service organization’s internal controls are suitably designed to achieve the internal control objectives, and whether the service organization’s internal controls are effective at achieving the internal control objectives. In addition, an entity relying on a service organization audit report should review the complementary user entity controls referenced in the report and ensure these controls or others are in place at the entity. If an entity relying on a service organization does not obtain a service organization audit report, the entity should ensure it has assessed the work being completed by the service organization, and it has implemented procedures to ensure both the accuracy of processing completed by the service organization and the information provided by the service organization. Condition: In May 2024, DOA requested and received the April 2024 service organization audit report that covered the period from September 1, 2023, to February 29, 2024. We found that DOA developed procedures to review the service organization audit report, assess the effectiveness of the internal controls on the computer system maintained by the service organization, and assess the complementary user entity controls. However, DOA did not complete its review and assessment of the April 2024 service organization audit report during FY 2023-24. Context: During FY 2023-24, DOA expended $30.9 million in HAF funding. DOA reported that $27.8 million, or 89.9 percent of the expenditures, was for benefit payments to various entities such as mortgage and utility companies on behalf of individuals who had their eligibility determinations processed by the computer system maintained by DOA’s service organization. We reviewed and discussed with DEHCR its procedures for determining eligibility for HAF participants, including its reliance on the computer system maintained by the service organization. Questioned Costs: None. Effect: DOA and the federal government cannot be assured that the service organization controls are effective in determining eligibility or completing federal reporting for HAF. Cause: Although DOA developed procedures to obtain and review the service organization audit report for HAF, it did not complete its review and assessment of the service organization audit report until October 2024. Recommendation: We recommend the Wisconsin Department of Administration implement its new policies and procedures to review and assess the service organization audit report for the Homeowner Assistance Fund to establish and maintain effective internal control over federal awards. Finding 2024-100: Homeowner Assistance Fund—Service Organization Internal Controls COVID-19—Homeowner Assistance Fund (Assistance Listing number 21.026) Award Number Award Year None 2021 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Department of Administration: The Wisconsin Department of Administration agrees with the audit finding and recommendation.
Coronavirus State and Local Fiscal Recovery Funds—Unallowable Costs Background: The State was advanced a total of $3.0 billion under the CSLFRF program in FY 2020-21 and FY 2021-22, from the U.S. Department of the Treasury (U.S. Treasury). CSLFRF was created under the American Rescue Plan Act (ARPA), and later revised by the Consolidated Appropriations Act, 2023. CSLFRF is administered by DOA. DOA expended funding under CSLFRF for various programs that it established. In addition, DOA entered into a memorandum of understanding (MOU) with various state agencies to administer several different programs funded by CSLFRF. In January 2022, DOA entered into an MOU with SPD to provide assistance to SPD to hire staff to fill project positions to address its case backlog. Through position requests to DOA in 2021, 2022, and 2023, SPD received approval to create 65.0 two-year project positions to be funded by the CSLFRF grant. Criteria: Under 2 CFR s. 200.303, SPD is responsible for establishing and maintaining effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Further, SPD is required to follow U.S. Treasury guidance that requires it to maintain documentation to demonstrate that CSLFRF funding was used in accordance with federal regulations. Condition: We reviewed payroll records to determine whether employee time charged to the CSLFRF grant was approved by an appropriate supervisor with knowledge of the employee’s work effort. We reviewed the approvals for a selection of 15 project employees at SPD funded by the CSLFRF grant and found that time was approved by an appropriate supervisor for all but one of the employees. We found that the time for one employee was not approved in STAR HCM, the State’s payroll system. Certain amounts charged to the grant for this employee were unallowable to be charged to the grant. This employee was appointed to one of the project positions funded by the CSLFRF grant under the MOU with DOA. This employee left state service on October 6 2023, and was appointed to the project position beginning on October 9, 2023. The employee ended employment with SPD on November 17, 2023. During the three pay periods between October 9, 2023, and November 17, 2023, the employee recorded 3 days of work time and 27 days of leave. Further, on November 30, 2023, the employee was paid $86,605 for accumulated unused leave earned in their previous position. Context: During FY 2023-24, SPD expended $5.6 million in CSLFRF funding. We interviewed SPD staff to gain an understanding of SPD’s administration of the CSLFRF funding, including how it charged payroll costs to the CSLFRF grant. We reviewed payroll transactions made by SPD for the CSLFRF program, identified the payout for a terminated employee, and followed up with SPD regarding the purpose of the transaction. Questioned Costs: $107,164, which consists of $86,605 in payment for unused leave and $20,559 in leave taken during the three-week period the employee worked in the project position. Effect: SPD charged payroll costs to the CSLFRF grant that did not relate to the underlying project positions established in the MOU with DOA. Cause: SPD staff indicated that charging the CSLFRF grant for the costs related to the unused leave for the employee was an oversight. According to SPD staff, the former employee made a decision to terminate from the project position and the unused leave was inadvertently charged to the grant. SPD staff did not explain why the 27 days of leave was charged to the grant during the months of October and November of 2023, or why the employee’s time was not approved in STAR. Recommendation: We recommend the Wisconsin State Public Defender’s Office: -review and update its procedures to ensure employee timesheets are appropriately approved by a supervisor with knowledge of each employee’s work effort; -review and update its procedures to ensure costs are charged to the correct accounting codes and funding sources are appropriately used; -take steps to ensure it administers the funding for the Coronavirus State and Local Fiscal Recovery Funds grant in compliance with the memorandum of understanding with the Department of Administration and with federal rules; and -adjust its accounting records to use a different funding source for the leave and termination payments for unused leave for the employee identified during the audit. Finding 2024-902: Coronavirus State and Local Fiscal Recovery Funds—Unallowable Costs COVID-19—Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: $107,164 Type of Finding: Noncompliance Response from the Wisconsin State Public Defender’s Office: The Wisconsin State Public Defender’s Office agrees with the audit finding and recommendations.
Coronavirus State and Local Fiscal Recovery Funds—Unallowable Costs Background: The State was advanced a total of $3.0 billion under the CSLFRF program in FY 2020-21 and FY 2021-22, from the U.S. Department of the Treasury (U.S. Treasury). CSLFRF was created under the American Rescue Plan Act (ARPA), and later revised by the Consolidated Appropriations Act, 2023. CSLFRF is administered by DOA. DOA expended funding under CSLFRF for various programs that it established. In addition, DOA entered into a memorandum of understanding (MOU) with various state agencies to administer several different programs funded by CSLFRF. In January 2022, DOA entered into an MOU with SPD to provide assistance to SPD to hire staff to fill project positions to address its case backlog. Through position requests to DOA in 2021, 2022, and 2023, SPD received approval to create 65.0 two-year project positions to be funded by the CSLFRF grant. Criteria: Under 2 CFR s. 200.303, SPD is responsible for establishing and maintaining effective internal control over federal awards to provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Further, SPD is required to follow U.S. Treasury guidance that requires it to maintain documentation to demonstrate that CSLFRF funding was used in accordance with federal regulations. Condition: We reviewed payroll records to determine whether employee time charged to the CSLFRF grant was approved by an appropriate supervisor with knowledge of the employee’s work effort. We reviewed the approvals for a selection of 15 project employees at SPD funded by the CSLFRF grant and found that time was approved by an appropriate supervisor for all but one of the employees. We found that the time for one employee was not approved in STAR HCM, the State’s payroll system. Certain amounts charged to the grant for this employee were unallowable to be charged to the grant. This employee was appointed to one of the project positions funded by the CSLFRF grant under the MOU with DOA. This employee left state service on October 6 2023, and was appointed to the project position beginning on October 9, 2023. The employee ended employment with SPD on November 17, 2023. During the three pay periods between October 9, 2023, and November 17, 2023, the employee recorded 3 days of work time and 27 days of leave. Further, on November 30, 2023, the employee was paid $86,605 for accumulated unused leave earned in their previous position. Context: During FY 2023-24, SPD expended $5.6 million in CSLFRF funding. We interviewed SPD staff to gain an understanding of SPD’s administration of the CSLFRF funding, including how it charged payroll costs to the CSLFRF grant. We reviewed payroll transactions made by SPD for the CSLFRF program, identified the payout for a terminated employee, and followed up with SPD regarding the purpose of the transaction. Questioned Costs: $107,164, which consists of $86,605 in payment for unused leave and $20,559 in leave taken during the three-week period the employee worked in the project position. Effect: SPD charged payroll costs to the CSLFRF grant that did not relate to the underlying project positions established in the MOU with DOA. Cause: SPD staff indicated that charging the CSLFRF grant for the costs related to the unused leave for the employee was an oversight. According to SPD staff, the former employee made a decision to terminate from the project position and the unused leave was inadvertently charged to the grant. SPD staff did not explain why the 27 days of leave was charged to the grant during the months of October and November of 2023, or why the employee’s time was not approved in STAR. Recommendation: We recommend the Wisconsin State Public Defender’s Office: -review and update its procedures to ensure employee timesheets are appropriately approved by a supervisor with knowledge of each employee’s work effort; -review and update its procedures to ensure costs are charged to the correct accounting codes and funding sources are appropriately used; -take steps to ensure it administers the funding for the Coronavirus State and Local Fiscal Recovery Funds grant in compliance with the memorandum of understanding with the Department of Administration and with federal rules; and -adjust its accounting records to use a different funding source for the leave and termination payments for unused leave for the employee identified during the audit. Finding 2024-902: Coronavirus State and Local Fiscal Recovery Funds—Unallowable Costs COVID-19—Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) Award Number Award Year None 2021 Questioned Costs: $107,164 Type of Finding: Noncompliance Response from the Wisconsin State Public Defender’s Office: The Wisconsin State Public Defender’s Office agrees with the audit finding and recommendations.
Waivers for State Innovation for Section 1332 of the Patient Protection and Affordable Care Act—Financial Reporting Background: Section 1332 of the federal Patient Protection and Affordable Care Act of 2010 (Affordable Care Act) permits a state to apply for a waiver to pursue innovative strategies for providing residents with access to high quality, affordable health insurance while retaining the basic protections of the Affordable Care Act. 2017 Wisconsin Act 138 created the Wisconsin Healthcare Stability Plan (WIHSP), under which the State covers a portion of the financial risk of health insurers. Act 138 required OCI to implement WIHSP if Wisconsin’s waiver plan was approved by the federal government. OCI applied for a waiver, which was approved by the U.S. Department of Health and Human Services (DHHS) in July 2018. Under the approved waiver, a health insurance carrier in the healthcare insurance exchange may be reimbursed a portion of the claims it incurred in the prior calendar year. In 2019, DHHS awarded OCI funding under the 1332 State Innovation Waivers program to administer WIHSP for the period January 1, 2019, through December 31, 2023. OCI received an extension of the federal funding in 2022, covering the period January 1, 2024, through December 31, 2028. From the inception of the program and through June 30, 2024, OCI expended $680.8 million under the 1332 State Innovation Waivers program. The federal funding is used, along with state appropriations, to reimburse insurance carriers participating in the healthcare insurance exchange for a portion of enrollee claims. Insurance carriers submit various attestations and enrollee claim information to OCI. Criteria: 2 CFR s. 200.303 requires OCI to establish and maintain effective internal control over its federal programs and to provide reasonable assurance that the federal programs are administered in compliance with federal statutes, regulations, and the terms and conditions of its federal awards. Under the terms and conditions for the 1332 State Innovation Waivers grant award, OCI is required to report expenditures annually using the Standard Form 425 (SF-425) Federal Financial Report. Condition: We found OCI did not complete all required lines of the SF-425 Federal Financial Report filed for the year ended December 31, 2023. OCI reported zero expenditures in line 10e (federal share of expenditures) when OCI should have reported $680,759,297 in line 10e. As a result, line 10h, which is a calculated field, incorrectly indicated that OCI had an unobligated balance of federal funds of $894,224,285, when the unobligated balance should have been reported as $213,464,988. Context: OCI expended $208.3 million in federal funds under the 1332 State Innovations Waivers program in FY 2023-24. We reviewed OCI’s written procedures for federal reporting and interviewed the WIHSP Administrator and OCI finance staff to gain an understanding of the reporting procedures. We tested the SF-425 Federal Financial Report submitted by OCI for calendar year 2023 and compared the amounts reported to the accounting records. Questioned Costs: None. Effect: OCI reported inaccurate information in its federal financial report filed in FY 2023-24, which resulted in inaccurate information being provided to the federal awarding agency. Cause: OCI staff indicated they believed the prepopulated fields were not editable and that they only signed and certified the report. We also note OCI did not have procedures in place to require a secondary review and sign off on the report prior to submission. Recommendation: We recommend the Wisconsin Office of the Commissioner of Insurance: -develop written procedures to require a secondary review of the annual Standard Form 425 Federal Financial Report that include steps for conducting and documenting the secondary review; and -work with the U.S. Department of Health and Human Services to determine whether the Standard Form 425 Federal Financial Report for calendar year 2023 needs to be corrected and refiled. Finding 2024-900: Waivers for State Innovation for Section 1332 of the Patient Protection and Affordable Care Act—Financial Reporting Waivers for State Innovation for Section 1332 of the Patient Protection and Affordable Care Act (PPACA) (Assistance Listing number 93.423) Award Numbers Award Years SIWIW190008-03 2021 SIWIW190008-04 2022 SIWIW190008-05 2023 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Office of the Commissioner of Insurance: The Wisconsin Office of the Commissioner of Insurance agrees with the audit finding and recommendations.
Waivers for State Innovation for Section 1332 of the Patient Protection and Affordable Care Act—Verification Audits Background: Section 1332 of the Affordable Care Act permits a state to apply for a waiver to pursue innovative strategies for providing residents with access to high quality, affordable health insurance while retaining the basic protections of the Affordable Care Act. 2017 Wisconsin Act 138 created WIHSP, under which the State covers a portion of the financial risk of health insurance carriers. Act 138 required OCI to implement WIHSP if Wisconsin’s waiver plan was approved by the federal government. OCI applied for a waiver, which was approved by DHHS in July 2018. Under the approved waiver, a health insurance carrier in the healthcare insurance exchange may be reimbursed a portion of the claims it incurred in the prior calendar year. In 2019, DHHS awarded OCI funding under the 1332 State Innovation Waivers program to administer WIHSP for the period January 1, 2019, through December 31, 2023. OCI received an extension of the federal funding in 2022, covering the period January 1, 2024, through December 31, 2028. From the inception of the program and through June 30, 2024, OCI expended $680.8 million under the 1332 State Innovation Waivers program. The federal funding is used, along with state appropriations, to reimburse insurance carriers participating in the healthcare insurance exchange for a portion of enrollee claims. Insurance carriers submit various attestations and enrollee claim information to OCI. Criteria: 2 CFR s. 200.303 requires OCI to establish and maintain effective internal control over its federal programs and to provide reasonable assurance that the federal programs are administered in compliance with federal statutes, regulations, and the terms and conditions of its federal awards. OCI is also responsible for ensuring costs charged to federal grant programs it administers are allowable under federal statutes, federal regulations, and the terms and conditions of the federal award. To ensure the attestations were completed, and to assess the validity of the enrollee claims submitted by the insurance carriers, the WIHSP Administrator and finance staff at OCI conducted a verification audit. OCI’s written procedures for conducting the verification audit required OCI to: -test a random sample of at least 60 enrollees across all the participating insurance carriers for the phase I audit, including ensuring claims for these enrollees were incurred in the benefit year and paid prior to the established deadline of April 30 of the calendar year following the applicable benefit year; -randomly sample and review proof of payment for two claims for each enrollee sampled during the phase I audit; and -have a secondary reviewer review a portion of the audit documents and initial review results for the phase I and II audits. Condition: We identified two concerns with OCI’s administration of the verification audits it performed related to its 1332 State Innovation Waivers program. First, in the phase I audit conducted for benefit year 2022, OCI did not detect that one insurance carrier reported in the audit response spreadsheet that it had paid two claims for two enrollees after April 30, which was the established deadline for claims. This was not detected by OCI during either the initial or secondary review of the claims information in the audit response spreadsheet. After we identified this issue, OCI followed up with the insurance carrier and determined that the payment dates for these claims had been inaccurately reported and obtained documentation from the insurance carrier to support that the claims had been paid prior to the April 30 deadline. Second, for the phase II audit conducted for benefit year 2022, the proof of payment for 9 of the 130 claims tested included the claim date but did not include documentation of the payment date. After we identified this issue, OCI followed up with the insurance carriers and obtained documentation to support that the claims were paid prior to the April 30 deadline. Context: OCI expended $208.3 million in federal funds under the 1332 State Innovations Waiver program in FY 2023-24. We reviewed OCI’s written procedures and interviewed the WIHSP Administrator and OCI finance staff to gain an understanding of the phase I and phase II verification audits. We reviewed the documentation related to the verification audits completed for benefit year 2022, which supported payments made to insurance carriers in FY 2023-24. For all 65 enrollees that OCI sampled for phase I of the verification audits, we tested whether documentation matched between the claims report and the amounts included in the insurance carriers audit response spreadsheet. For the 65 enrollees in phase II of the verification audit, we also tested the claims documentation provided by the insurance carriers. During our FY 2020-21 single audit (report 22-5), we identified concerns with OCI’s audit process and made recommendations to OCI. Questioned Costs: None. Effect: OCI may not have identified claims that did not meet eligibility requirements or lacked appropriate supporting documentation, which could result in unallowable costs. Cause: OCI staff did not correctly follow the verification audit written procedures, which require the initial and secondary reviewer to verify that sampled claims were paid prior to the established deadline. Further, OCI’s audit response spreadsheet does not restrict insurance carriers from entering claims incurred or paid outside of the allowable periods. OCI staff relied on the claim date in completing the phase II audit and did not request the payment date information from the insurance carriers. Further, the instructions OCI provided insurers for submitting proof of payment for the phase II audit did not explicitly direct insurance carriers to include the payment date on the documentation submitted to support the claims. Recommendation: We recommend the Wisconsin Office of the Commissioner of Insurance: -review and update the audit response spreadsheet to restrict insurance carriers from entering claims service and payment dates outside of the allowable periods; -update instructions and guidance provided to insurance carriers to clearly indicate that claims documentation submitted to the Office of the Commissioner of Insurance should include the claim payment date; and -follow its written procedures for conducting verification audits, including reviewing to ensure the claims documentation supports that claims have been paid before the established deadline. Finding 2024-901: Waivers for State Innovation for Section 1332 of the Patient Protection and Affordable Care Act—Verification Audits Waivers for State Innovation for Section 1332 of the Patient Protection and Affordable Care Act (PPACA) (Assistance Listing number 93.423) Award Numbers Award Years SIWIW190008-03 2021 SIWIW190008-04 2022 Questioned Costs: None Type of Finding: Significant Deficiency, Noncompliance Response from the Wisconsin Office of the Commissioner of Insurance: The Wisconsin Office of the Commissioner of Insurance agrees with the audit finding and recommendations.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions – Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Number and Year (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions – Wage Rate Requirements Audit Finding: Material Weakness, Material Noncompliance, Modified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . Section III – Federal Award Findings and Questioned Costs (Continued) FINDING 2024-003 (Continued) (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation had two projects for playground equipment and installation at various buildings which was funded with ESSER III (84.425U) grant awards. The School Corporation did not include Davis-Bacon wage rate requirements in the vendor contract, and the School Corporation did not obtain the weekly payroll reports certifications from the construction vendor to monitor compliance with Davis-Bacon wage rate requirements. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. The total project cost disbursed during the audit period was $219,292 which included materials and labor. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The finding number was 2022-001. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed for projects requiring labor installation and funded by federal grants subject to Davis-Bacon wage rate requirements to ensure compliance with federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria or specific requirement: Compliance: 2 CFR §200.332(a) - Requirements for Pass-Through Entities states, in part, that 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 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 City did not furnish all required information to subrecipients at the time the subawards were issued. Context: The City failed to obtain the required Unique Entity Identifier (UEI) from one out of five subrecipients tested and the Federal Award Identification Number (FAIN) from five out of five subrecipients tested in accordance with proper subrecipient monitoring procedures. Questioned costs: None. Cause: The City did not establish effective internal controls and procedures over subrecipient monitoring.Effect: Excluding required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about program-specific 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 subrecipients’ Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance.Recommendation: The City should review and enhance its internal controls and procedures to ensure that all required information is included in subawards at the time of issuance and maintained in subsequent modifications. Views of responsible officials: The City agrees with this finding. See separate Corrective Action Plan related to this finding.
Finding 2024‐004: Significant Deficiency and Non‐Material Noncompliance – Housing Voucher Cluster REAC Report Criteria: Per 2 CFR Section 200.303, non‐Federal entities receiving federal awards must establish and maintain internal controls designed to reasonably ensure compliance with federal statutes, regulations, and terms and conditions of the federal award. In accordance with the requirements of this program, grant recipients are to maintain complete and accurate accounts which requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll‐forward of equity, and (3) errors are corrected and detected. Condition: During our testing, we noted that the County’s Real Estate Assessment Center (“REAC”) submission from 2022 and 2023 were rejected by the US Department of Housing and Urban Development (“HUD”) because amounts did not properly roll forward from previous periods. The REAC submission did not meet the requirement of being completed timely and accurately. Cause: The County’s internal control to ensure the accuracy of the REAC submissions was not operating effectively. Effect: Inaccurate record keeping results in unreliable information on which to base decision making. This also resulted in rejected REAC submissions. Questioned Costs: None Repeat Finding: No Recommendation: The County utilizes contractors to assist in HUD REAC submissions. However, a contractor with accounting expertise lacks context related to the activities and administration of the program at the County. We recommend that the individuals overseeing the process of completing HUD REAC submissions conduct thorough reviews of the accounting records that support the REAC submission inputs and that the amounts are reported on the proper Financial Data Schedule Lines within the REAC submission. Views of Responsible Officials: The Office of Housing and Community Development concurs with the finding and recommendations.
Finding 2024‐004: Significant Deficiency and Non‐Material Noncompliance – Housing Voucher Cluster REAC Report Criteria: Per 2 CFR Section 200.303, non‐Federal entities receiving federal awards must establish and maintain internal controls designed to reasonably ensure compliance with federal statutes, regulations, and terms and conditions of the federal award. In accordance with the requirements of this program, grant recipients are to maintain complete and accurate accounts which requires that (1) account balances are properly maintained, (2) records and accounting transactions support a proper roll‐forward of equity, and (3) errors are corrected and detected. Condition: During our testing, we noted that the County’s Real Estate Assessment Center (“REAC”) submission from 2022 and 2023 were rejected by the US Department of Housing and Urban Development (“HUD”) because amounts did not properly roll forward from previous periods. The REAC submission did not meet the requirement of being completed timely and accurately. Cause: The County’s internal control to ensure the accuracy of the REAC submissions was not operating effectively. Effect: Inaccurate record keeping results in unreliable information on which to base decision making. This also resulted in rejected REAC submissions. Questioned Costs: None Repeat Finding: No Recommendation: The County utilizes contractors to assist in HUD REAC submissions. However, a contractor with accounting expertise lacks context related to the activities and administration of the program at the County. We recommend that the individuals overseeing the process of completing HUD REAC submissions conduct thorough reviews of the accounting records that support the REAC submission inputs and that the amounts are reported on the proper Financial Data Schedule Lines within the REAC submission. Views of Responsible Officials: The Office of Housing and Community Development concurs with the finding and recommendations.
Assistance Listing Number, Federal Agency, and Program Name - Student Financial Assistance Cluster (Federal Pell Grant Program - 84.063, Federal Direct Student Loans - 84.268) Federal Award Identification Number and Year - 84.063 and 84.268 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 668.22 outlines the requirements for institutions to follow when returns of Title IV funds are required, including identifying when calculations are necessary and the time frame in which they are required to be returned. Condition - There was a lack of internal controls in place related to the return of Title IV funds. Questioned Costs - $104 If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs were Undetermined or Otherwise Could Not be Reported - N/A Identification of How Questioned Costs Were Computed - R2T4 corrected amounts were computed using the correct number of days attended. Questioned costs were computed by comparing the required amounts to be returned to the amount originally returned by the University for the four incorrect calculations. Context - Of the seven students selected for R2T4 calculation testing, five student calculations included incorrect number of days attended within the calculation inputs. Cause and Effect - A lack of review of the inputs to the R2T4 calculation inputs lead to inaccurate computation of the amount to be returned. Recommendation - We recommend the University implement a review control that would identify errors in inputs to the R2T4 calculation. Views of Responsible Officials and Corrective Action Plan - The director will update the academic calendar on the COD R2T4 calculator yearly and verify dates and length of breaks are correct. The University will continue to have the senior financial aid advisor complete R2T4, and the director will sign off on calculations.
Assistance Listing Number, Federal Agency, and Program Name - Student Financial Assistance Cluster (Federal Pell Grant Program - 84.063, Federal Direct Student Loans - 84.268) Federal Award Identification Number and Year - 84.063 and 84.268 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - In accordance with 2 CFR 200.303, the College must establish and maintain effective internal control over its federal awards in order to provide reasonable assurance that it is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Specific to these Title IV programs, 34 CFR 668.22 outlines the requirements for institutions to follow when returns of Title IV funds are required, including identifying when calculations are necessary and the time frame in which they are required to be returned. Condition - There was a lack of internal controls in place related to the return of Title IV funds. Questioned Costs - $104 If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs were Undetermined or Otherwise Could Not be Reported - N/A Identification of How Questioned Costs Were Computed - R2T4 corrected amounts were computed using the correct number of days attended. Questioned costs were computed by comparing the required amounts to be returned to the amount originally returned by the University for the four incorrect calculations. Context - Of the seven students selected for R2T4 calculation testing, five student calculations included incorrect number of days attended within the calculation inputs. Cause and Effect - A lack of review of the inputs to the R2T4 calculation inputs lead to inaccurate computation of the amount to be returned. Recommendation - We recommend the University implement a review control that would identify errors in inputs to the R2T4 calculation. Views of Responsible Officials and Corrective Action Plan - The director will update the academic calendar on the COD R2T4 calculator yearly and verify dates and length of breaks are correct. The University will continue to have the senior financial aid advisor complete R2T4, and the director will sign off on calculations.
2024-004 8540.032 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Code of Federal Regulations, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless of if they receive aid from the institution or not. Changes to said status are required to be reported within 30 days of becoming aware of the status change, or with the next scheduled transmission of statuses if the scheduled transmission is within 60 days. The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student’s enrollment status, the effective date of the status, and an anticipated completion date. " The University did not properly report student enrollment changes for students who received federal student aid to the National Student Loan Data System (NSLDS). N/A "During our testing of 9 students, we identified 4 students whose enrollment status changes were not reported, 1 student with an incorrect effective date reported, 1 student with an incorrect program begin date, and 6 students whose status changes were not reported timely. In addition, 1 student was incorrectly reported as withdrawal who should not have had a status change reported. We also note that for 7 of the selected students, enrollment status was not certified every 60 days. We also note that the University did not document any evidence of review." The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. The University was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans. Yes We recommend the University review current processes for reporting to NSLDS and implement procedures to ensure submissions are reported timely and accurately. Management agrees with this finding. See 0100.25
2024-004 8540.032 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Code of Federal Regulations, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless of if they receive aid from the institution or not. Changes to said status are required to be reported within 30 days of becoming aware of the status change, or with the next scheduled transmission of statuses if the scheduled transmission is within 60 days. The Code of Federal Regulations, 34 CFR 685.309(b), states the school is required to report changes in the student’s enrollment status, the effective date of the status, and an anticipated completion date. " The University did not properly report student enrollment changes for students who received federal student aid to the National Student Loan Data System (NSLDS). N/A "During our testing of 9 students, we identified 4 students whose enrollment status changes were not reported, 1 student with an incorrect effective date reported, 1 student with an incorrect program begin date, and 6 students whose status changes were not reported timely. In addition, 1 student was incorrectly reported as withdrawal who should not have had a status change reported. We also note that for 7 of the selected students, enrollment status was not certified every 60 days. We also note that the University did not document any evidence of review." The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. The University was not in compliance with the requirements to properly report student enrollment data correctly. Incorrect dates submitted to NSLDS may be used to determine the grace period for the repayment and interest of outstanding Title IV student loans. Yes We recommend the University review current processes for reporting to NSLDS and implement procedures to ensure submissions are reported timely and accurately. Management agrees with this finding. See 0100.25
2024-005 8540.10 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Material Weakness Material Appears to be systemic. "34 CFR 668.21(a) states that the institution must return all title IV, HEA program funds that were credited to the student's account at the instituion or disbursed directly to the student for th payment period. The instituion must return those funds no later than 30 days after the date that the instituion becomes aware that the student will not or has not begun attendance. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." The University did not properly evaluate students in need of Return of Title IV (R2T4) calculations. 283.39 "During our testing of 6 R2T4 calculations, we noted that 4 students were incorrectly evaluated as a withdrawal exemption and no R2T4 calculation was performed. For these 4 students, all 4 should have had an R2T4 calculation, and 2 should have had returned funds. In addition, we observed 1 student for whom 100% of funds were returned despite the student completing a portion of the term. We also noted 1 student who completed the term with passing grades for whom an R2T4 calculation was completed, and funds were returned in error. Additionally, R2T4 calculations did not have documentation of review." The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. The University could return incorrect amounts based off of their calculations and incorrect calculations could effect student repayment amounts based off of amount earned. No We recommend that the University review policies and procedures related to R2T4 calculations to ensure calculations are performed accurately. Management agrees with this finding. See 0100.25
2024-005 8540.10 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Material Weakness Material Appears to be systemic. "34 CFR 668.21(a) states that the institution must return all title IV, HEA program funds that were credited to the student's account at the instituion or disbursed directly to the student for th payment period. The instituion must return those funds no later than 30 days after the date that the instituion becomes aware that the student will not or has not begun attendance. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." The University did not properly evaluate students in need of Return of Title IV (R2T4) calculations. 283.39 "During our testing of 6 R2T4 calculations, we noted that 4 students were incorrectly evaluated as a withdrawal exemption and no R2T4 calculation was performed. For these 4 students, all 4 should have had an R2T4 calculation, and 2 should have had returned funds. In addition, we observed 1 student for whom 100% of funds were returned despite the student completing a portion of the term. We also noted 1 student who completed the term with passing grades for whom an R2T4 calculation was completed, and funds were returned in error. Additionally, R2T4 calculations did not have documentation of review." The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. The University could return incorrect amounts based off of their calculations and incorrect calculations could effect student repayment amounts based off of amount earned. No We recommend that the University review policies and procedures related to R2T4 calculations to ensure calculations are performed accurately. Management agrees with this finding. See 0100.25
2024-006 8540.13 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The regulation states that the college must designate a qualified individual responsible for overseeing and implementting your information security program and enforcing your information security program. (16 CFR 314.4(a)). The entity shall have a Written Information Security Program (WISP) that outlines the design and implementation of the risk assessment procedures. (16 CFR 314.4(b)). At a minimum, the institution's written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d)). Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." "The College has a Written Information Security Program; however, the College did not meet the minimum requirements stated in the Gramm-Leach-Bliley Act. Additionally, we were unable to observe evidence that the WISP was formally reviewed and approved. " N/A "The WISP was missing the element discussing the secure disposal of customer information. Additionally, there was not am observable formal review or authorization. " The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. There is a risk the College’s information and systems could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. Yes We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
2024-006 8540.13 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). The regulation states that the college must designate a qualified individual responsible for overseeing and implementting your information security program and enforcing your information security program. (16 CFR 314.4(a)). The entity shall have a Written Information Security Program (WISP) that outlines the design and implementation of the risk assessment procedures. (16 CFR 314.4(b)). At a minimum, the institution's written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d)). Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." "The College has a Written Information Security Program; however, the College did not meet the minimum requirements stated in the Gramm-Leach-Bliley Act. Additionally, we were unable to observe evidence that the WISP was formally reviewed and approved. " N/A "The WISP was missing the element discussing the secure disposal of customer information. Additionally, there was not am observable formal review or authorization. " The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. There is a risk the College’s information and systems could be vulnerable to attacks or intrusions, and these attacks may not be detected in a timely manner. Yes We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
2024-007 8515.01 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Code of Federal Regulations, 34 CFR 682.604, states that a school must ensure that exit counseling is conducted with each Stafford Loan borrower and graduate or professional student PLUS Loan borrower either in person, by audiovisual presentation, or by interactive electronic means. In each case, the school must ensure that this counseling is conducted shortly before the student borrower ceases at least half-time study at the school. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 34 CFR 690.62 states the Pell grant for an academic year is based upon the payment and disbursement schedule published by the Secretary for each award year. 34 CFR 690.80(b)(1)) states if the student’s enrollment status changes from one academic term to another within the same award year, the institution shall recalculate the Federal Pell Grant award for the new payment period taking into account any changes in the cost of attendance." The University used a third-party servicer to perform key controls, but did not have documented review of the work performed by their third-party servicer. Additionally, the University did not notify 3 students of required exit counseling. The University also incorrectly disbursed Pell funds for 4 students. 1845 E During our eligibility testing of 60 students, we noted that the university did not document evidence of review for controls performed by their third party servicer. The University did not document review of award packaging, professional judgment determinations, COD reporting, or verification procedures. We also noted that 3 students were graduates or withdrawals but did not receive notifcation of required exit counseling. Additionally, out of 37 students receiving Pell, 3 were overawarded and 1 was underawarded. 1 student had an incorrect EFC used in their award packaging. The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Without proper controls the University risks being out of compliance with federal laws and regulations, as well as program compliance requirements. No We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
2024-007 8515.01 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Code of Federal Regulations, 34 CFR 682.604, states that a school must ensure that exit counseling is conducted with each Stafford Loan borrower and graduate or professional student PLUS Loan borrower either in person, by audiovisual presentation, or by interactive electronic means. In each case, the school must ensure that this counseling is conducted shortly before the student borrower ceases at least half-time study at the school. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 34 CFR 690.62 states the Pell grant for an academic year is based upon the payment and disbursement schedule published by the Secretary for each award year. 34 CFR 690.80(b)(1)) states if the student’s enrollment status changes from one academic term to another within the same award year, the institution shall recalculate the Federal Pell Grant award for the new payment period taking into account any changes in the cost of attendance." The University used a third-party servicer to perform key controls, but did not have documented review of the work performed by their third-party servicer. Additionally, the University did not notify 3 students of required exit counseling. The University also incorrectly disbursed Pell funds for 4 students. 1845 E During our eligibility testing of 60 students, we noted that the university did not document evidence of review for controls performed by their third party servicer. The University did not document review of award packaging, professional judgment determinations, COD reporting, or verification procedures. We also noted that 3 students were graduates or withdrawals but did not receive notifcation of required exit counseling. Additionally, out of 37 students receiving Pell, 3 were overawarded and 1 was underawarded. 1 student had an incorrect EFC used in their award packaging. The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Without proper controls the University risks being out of compliance with federal laws and regulations, as well as program compliance requirements. No We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
2024-008 8540.17 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." Six Title IV checks were observed during testing that were stale more than 240 days. 4333.85 The University had six stale Title IV checks greater than 240 days The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Funds are not returned to the Department of Education in a timely manner No We recommend that the University review policies and procedures related to student refund checks to ensure stale checks are returned to the Department of Education. Management agrees with this finding. See 0100.25
2024-008 8540.17 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." Six Title IV checks were observed during testing that were stale more than 240 days. 4333.85 The University had six stale Title IV checks greater than 240 days The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Funds are not returned to the Department of Education in a timely manner No We recommend that the University review policies and procedures related to student refund checks to ensure stale checks are returned to the Department of Education. Management agrees with this finding. See 0100.25
2024-009 8565.02 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "The Code of Federal Regulations (34 CFR 685.300(b)(5)) and the Federal Student Aid Handbook, Volume 4, Chapter 6, states loan reconciliation is a mandatory monthly process requiring the comparison of both internal and external records to be completed by an institution participating in the Direct Loan Program. Reconciliation is conducted to identify and resolve differences between net draws and disbursements reported to the Common Origination and Disbursement for a specific award year. An institution must document the reasons and resolve the discrepancies identified during the reconciliation process and that a review had been performed. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." The University did not have documentation that Direct Loan Reconciliation prepared by third-party servicer was reviewed. N/A During our testing we examined four months of direct loan reconciliations (August, December, March, & May). For all four, the University's third party servicer (Campus Ivy) performed preparation and review of the reconciliation; however, Urshan did not review the work of Campus Ivy or a SOC1 report. The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Without proper controls the University risks being out of compliance with federal laws and regulations, as well as program compliance requirements. No We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
2024-009 8565.02 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Did not result in material questioned costs therefore will document as a SD. Finding is neither systemic nor will it lead to 5% questioned cost. N/A "The Code of Federal Regulations (34 CFR 685.300(b)(5)) and the Federal Student Aid Handbook, Volume 4, Chapter 6, states loan reconciliation is a mandatory monthly process requiring the comparison of both internal and external records to be completed by an institution participating in the Direct Loan Program. Reconciliation is conducted to identify and resolve differences between net draws and disbursements reported to the Common Origination and Disbursement for a specific award year. An institution must document the reasons and resolve the discrepancies identified during the reconciliation process and that a review had been performed. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements." The University did not have documentation that Direct Loan Reconciliation prepared by third-party servicer was reviewed. N/A During our testing we examined four months of direct loan reconciliations (August, December, March, & May). For all four, the University's third party servicer (Campus Ivy) performed preparation and review of the reconciliation; however, Urshan did not review the work of Campus Ivy or a SOC1 report. The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Without proper controls the University risks being out of compliance with federal laws and regulations, as well as program compliance requirements. No We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
2024-010 8540.15 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Control finding did not result in material questioned costs-therefore we will document as a SD. N/A - I/C Finding Only Finding is neither systemic nor will it lead to 5% questioned cost. N/A Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The University used a third-party servicer to perform key controls, but did not have documented review of the work performed by their third-party servicer. Additionally, we were unable to observe evidence that the University reviewed cash drawdowns prepared by the third party processor. N/A During our testing of Credit Balance refunds, CLA observed that the University did not have documentation of formal review. Additionally, during our testing of Cash Management CLA observed two draws that we were unable to verify review occurred. The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Without proper controls the University risks being out of compliance with federal laws and regulations, as well as program compliance requirements. No We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
2024-010 8540.15 Department Of Education Student Financial Aid 84.063, 84.268 "P063P218567-2024 P268K228567-2024" N/A N/A 7/1/23 - 6/30/24 Significant Deficiency Control finding did not result in material questioned costs-therefore we will document as a SD. N/A - I/C Finding Only Finding is neither systemic nor will it lead to 5% questioned cost. N/A Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The University used a third-party servicer to perform key controls, but did not have documented review of the work performed by their third-party servicer. Additionally, we were unable to observe evidence that the University reviewed cash drawdowns prepared by the third party processor. N/A During our testing of Credit Balance refunds, CLA observed that the University did not have documentation of formal review. Additionally, during our testing of Cash Management CLA observed two draws that we were unable to verify review occurred. The college did not have the appropriate resources and staffing in place to verify they were in compliance with all requirements. Without proper controls the University risks being out of compliance with federal laws and regulations, as well as program compliance requirements. No We recommend the College design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Management agrees with this finding. See 0100.25
Program Information: Home Investment Partnerships Program (ALN #14.239) and Coronavirus State and Local Fiscal Recovery Funds (ALN #21.027) Criteria: 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). Per 2 CFR section 200.332, the subaward is to clearly identify to the subrecipient required information, including identification that the award is a subaward by providing information described in 200.332 (b)(1); all requirements imposed by the Pass-through Entity (PTE) on the subrecipient so that the federal award is used in accordance with federal statutes, regulations; and the terms and conditions of the award; and any additional requirements that the PTE imposes on the subrecipient. Additionally, per 2 CFR section 200.332 (f), the Organization should verify that a subrecipient is audited as required. Condition: The subawards did not include the required federal provisions or list the assistance listing numbers. The Organization did not obtain the most recently available audit reports of subrecipients. Questioned Costs: None. Context: This condition occurred for 8 out of 8 subawards selected for testing. Cause: Insufficient internal control and administrative oversight. Effect or Potential Effect: The subrecipients may not be aware of certain award information in order to comply with federal statutes, regulations, and the terms and conditions of the award. Repeat Finding: No
Program Information: Home Investment Partnerships Program (ALN #14.239) and Coronavirus State and Local Fiscal Recovery Funds (ALN #21.027) Criteria: 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). Per 2 CFR section 200.332, the subaward is to clearly identify to the subrecipient required information, including identification that the award is a subaward by providing information described in 200.332 (b)(1); all requirements imposed by the Pass-through Entity (PTE) on the subrecipient so that the federal award is used in accordance with federal statutes, regulations; and the terms and conditions of the award; and any additional requirements that the PTE imposes on the subrecipient. Additionally, per 2 CFR section 200.332 (f), the Organization should verify that a subrecipient is audited as required. Condition: The subawards did not include the required federal provisions or list the assistance listing numbers. The Organization did not obtain the most recently available audit reports of subrecipients. Questioned Costs: None. Context: This condition occurred for 8 out of 8 subawards selected for testing. Cause: Insufficient internal control and administrative oversight. Effect or Potential Effect: The subrecipients may not be aware of certain award information in order to comply with federal statutes, regulations, and the terms and conditions of the award. Repeat Finding: No
Program Information: Home Investment Partnerships Program (ALN #14.239) and Coronavirus State and Local Fiscal Recovery Funds (ALN #21.027) Criteria: 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). Per 2 CFR section 200.332, the subaward is to clearly identify to the subrecipient required information, including identification that the award is a subaward by providing information described in 200.332 (b)(1); all requirements imposed by the Pass-through Entity (PTE) on the subrecipient so that the federal award is used in accordance with federal statutes, regulations; and the terms and conditions of the award; and any additional requirements that the PTE imposes on the subrecipient. Additionally, per 2 CFR section 200.332 (f), the Organization should verify that a subrecipient is audited as required. Condition: The subawards did not include the required federal provisions or list the assistance listing numbers. The Organization did not obtain the most recently available audit reports of subrecipients. Questioned Costs: None. Context: This condition occurred for 8 out of 8 subawards selected for testing. Cause: Insufficient internal control and administrative oversight. Effect or Potential Effect: The subrecipients may not be aware of certain award information in order to comply with federal statutes, regulations, and the terms and conditions of the award. Repeat Finding: No
Program Information: Home Investment Partnerships Program (ALN #14.239) and Coronavirus State and Local Fiscal Recovery Funds (ALN #21.027) Criteria: 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). Per 2 CFR section 200.332, the subaward is to clearly identify to the subrecipient required information, including identification that the award is a subaward by providing information described in 200.332 (b)(1); all requirements imposed by the Pass-through Entity (PTE) on the subrecipient so that the federal award is used in accordance with federal statutes, regulations; and the terms and conditions of the award; and any additional requirements that the PTE imposes on the subrecipient. Additionally, per 2 CFR section 200.332 (f), the Organization should verify that a subrecipient is audited as required. Condition: The subawards did not include the required federal provisions or list the assistance listing numbers. The Organization did not obtain the most recently available audit reports of subrecipients. Questioned Costs: None. Context: This condition occurred for 8 out of 8 subawards selected for testing. Cause: Insufficient internal control and administrative oversight. Effect or Potential Effect: The subrecipients may not be aware of certain award information in order to comply with federal statutes, regulations, and the terms and conditions of the award. Repeat Finding: No
2022-004 Impact Aid Application Controls (Repeated 2023-004) CFDA Title: Impact Aid CFDA Number: 84.041 Federal Award Number: Federal Agency: Department of Education Pass-through Entity: Condition: The District does not have an internal control system in place to ensure that supporting documentation is maintained to support the Impact Aid Applications for the elementary and high school. This is a repeat finding from the prior year audit. Criteria: 1. 2 CFR section 200.303 requires that the District establish and maintain an effective internal control system over the federal award to provide reasonable assurance that the District is managing the federal awards in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2. Application for Impact Aid - Section 7003 (OMB No. 1810-0687) - Each year an LEA must submit this application, which provides the following information: counts of federally connected children in various categories, membership and average daily attendance data, and information on expenditures for children with disabilities. This form is in the Impact Aid Grant System, which does not have a public link, therefore school districts will need to provide a copy to the auditor. Context: We requested the supporting documentation to test the compliance of reported students counts on the elementary and high school impact aid applications, but the District had a difficult time providing the supporting application and trust land documentation to support the application. The verification of the trust land students from the Tribe had to be provided again from the trip to support spreadsheets of the students and their addresses. Effect: The District risk of noncompliance with federal programs increases if documentation is not maintained to support those compliance requirements. Cause: The District did not establish and maintain an adequate internal control system ensure that supporting documentation is maintained to support the membership counts of the children who live on Indian lands. Recommendation: We recommend that the District review its internal control systems over its Impact Aid application, and ensure that the document management systems are adequate to ensure appropriate filing of supporting documentation to the applications are maintained so that information can be found in future years.
2024-001 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2023-0001) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 4 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2024-001 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2023-0001) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 4 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2024-001 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2023-0001) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 4 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2024-001 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2023-0001) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 4 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2024-001 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2023-0001) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 4 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2024-001 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2023-0001) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 4 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2024-001 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2023-0001) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 4 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2024-002 REPORTING Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor WIOA Cluster 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Board is required to submit MACC reports to WorkForce WV on a monthly basis. Condition: During our testing of reporting, for all MACC reports selected for testing management could not provide adequate support that the MACC reports were properly reviewed and approved prior to being submitted. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $1,377,447 for the year ended June 30, 2024. Cause: The Board did not have adequate policies and internal controls in place to ensure that all required reports for the WIOA Cluster were reviewed and approved prior to submission. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board design and implement controls to ensure that all required reporting is submitted accurately and in a timely fashion. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.