Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Foster Care – Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2401MNFOST Federal Award Identification Number and Year: 2401MNFOST, 2024 Compliance Requirement Affected: Activities Allowed/Allowable Costs Award Period: Year Ending December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The County's internal controls do not include a process to retain documentation of review when the main reviewer is out of the office. Questioned Costs: None. Context: The State system does not have the ability to document electronic review of the disbursements when the Fiscal Supervisor is out of the office, and alternative physical evidence of review was not retained. In our testing, we noted that 1 of 12 SSIS disbursements tested did not have documentation of review. Cause: The County does not have policies or procedures in place to document review when reviewer is out of the office. Effect: Errors in the disbursements could occur. Repeat Finding: Yes, Finding 2023-009. Recommendation: It is recommended that the County implement procedures to document review of disbursements when not able to show an electronic approval in the SSIS system. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement procedures to document review of disbursements when not able to show an electronic approval in the SSIS system.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2405MN5MAP, 2405MN5ADM, 2401MNFOST Federal Award Identification Number and Year: 2405MN5MAP, 2405MN5ADM, 2401MNFOST, 2024 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2024 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2023-005 Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Medical Assistance (Medicaid Cluster), Foster Care – Title IV-E Assistance Listing Number: 93.778, 93.658 Pass-Through Agency: Minnesota Department of Human Services Pass-Through Numbers: 2405MN5MAP, 2405MN5ADM, 2401MNFOST Federal Award Identification Number and Year: 2405MN5MAP, 2405MN5ADM, 2401MNFOST, 2024 Compliance Requirement Affected: Eligibility Award Period: Year Ending December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Standard internal control procedures recommend internal reviews over case file eligibility determinations to ascertain case workers are complying with state and federal requirements and correctly determining program eligibility. Condition: The county is not performing internal casefile reviews of medical assistance or foster care cases. Questioned Costs: None. Context: During our testing of eligibility and testing of case file reviews completed during 2024 for Medical Assistance (Medicaid Cluster) and Foster Care – Title IV-E, it was noted that there were no documented case file reviews performed. Cause: Since the pandemic ended, the eligibility guidance has been changing rapidly, and the county is short staffed. Effect: The county could be reporting inaccurate information affecting the status of eligibility. Repeat Finding: Yes, Finding 2023-005 Recommendation: We recommend the County review case files on a periodic basis throughout the year and document the reviews. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The County will implement and document procedures for periodic review of cash files to ensure eligibility requirements are being met.
Assistance Listing Numbers 93.658 Foster Care Title IV-E 93.667 Social Services Block Grant Federal Agency U.S. Department of Health and Human Services Pass-Through Agency Wisconsin Department of Children and Families Award Numbers / Years Various Criteria: Per 2 CFR §200.430 - Compensation—personal services, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, are properly supported, and are consistent with the entity’s accounting records. Additionally, 2 CFR §200.303 - Internal Controls requires non-Federal entities to establish and maintain effective internal controls that provide reasonable assurance of compliance with Federal statutes, regulations, and terms and conditions of Federal awards. Condition/Context: As part of our testing procedures over payroll, we reconciled amounts recorded on the Payroll Ledger to the General Ledger for each payroll sample that we tested. From a sample of 40, we noted two instances where the amounts recorded in the General Ledger did not agree with the corresponding amounts recorded in the Payroll Ledger. Our sample was not statistically valid. Effect: Inaccurate or unsupported recording of payroll costs increases the risk that unallowable or misstated payroll expenses may be charged to Federal awards. If not corrected, this could result in inaccurate financial reporting and potential questioned costs. Questioned Costs: None noted. Cause: Payroll Ledger records are generated from programmatic reports based on timesheet entries in the county’s Dayforce system. While manual adjustments or allocations of programmatic reports to the Payroll Ledger are sometimes made before these records are ultimately posted to the General Ledger, no formal reconciliations are performed to account for these changes. As a result, discrepancies between the programmatic reports and the General Ledger are likely whenever there are adjustments or allocations in the programmatic reports which are not posted on the General Ledger. Recommendation: We recommend that management strengthen internal controls over payroll reconciliations by: • Implementing a system review process to ensure Payroll Ledger amounts reconcile to the General Ledger. • Conducting periodic reconciliations between the programmatic reports, Payroll Ledger and General Ledger and promptly investigating any discrepancies. • Providing training to accounting personnel on proper reconciliation procedures. Views of Responsible Officials: Dayforce is configured to allocate salary expenses to an employee’s home agency and department, regardless of where the employee assigns their hours in the timekeeping system. While the timesheet programmatic reflects the agency and department where hours and dollars are functionally charged, the payroll register aligns with the General Ledger based on home agency coding. As a result, the Payroll Register and General Ledger will reconcile with each other but may not align with programmatic reports, which are based on timesheet-level allocations. This system behavior is consistent with current configuration and financial reporting practices.
Assistance Listing Numbers 93.658 Foster Care Title IV-E 93.667 Social Services Block Grant Federal Agency U.S. Department of Health and Human Services Pass-Through Agency Wisconsin Department of Children and Families Award Numbers / Years Various Criteria: Per 2 CFR §200.430 - Compensation—personal services, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, are properly supported, and are consistent with the entity’s accounting records. Additionally, 2 CFR §200.303 - Internal Controls requires non-Federal entities to establish and maintain effective internal controls that provide reasonable assurance of compliance with Federal statutes, regulations, and terms and conditions of Federal awards. Condition/Context: As part of our testing procedures over payroll, we reconciled amounts recorded on the Payroll Ledger to the General Ledger for each payroll sample that we tested. From a sample of 40, we noted two instances where the amounts recorded in the General Ledger did not agree with the corresponding amounts recorded in the Payroll Ledger. Our sample was not statistically valid. Effect: Inaccurate or unsupported recording of payroll costs increases the risk that unallowable or misstated payroll expenses may be charged to Federal awards. If not corrected, this could result in inaccurate financial reporting and potential questioned costs. Questioned Costs: None noted. Cause: Payroll Ledger records are generated from programmatic reports based on timesheet entries in the county’s Dayforce system. While manual adjustments or allocations of programmatic reports to the Payroll Ledger are sometimes made before these records are ultimately posted to the General Ledger, no formal reconciliations are performed to account for these changes. As a result, discrepancies between the programmatic reports and the General Ledger are likely whenever there are adjustments or allocations in the programmatic reports which are not posted on the General Ledger. Recommendation: We recommend that management strengthen internal controls over payroll reconciliations by: • Implementing a system review process to ensure Payroll Ledger amounts reconcile to the General Ledger. • Conducting periodic reconciliations between the programmatic reports, Payroll Ledger and General Ledger and promptly investigating any discrepancies. • Providing training to accounting personnel on proper reconciliation procedures. Views of Responsible Officials: Dayforce is configured to allocate salary expenses to an employee’s home agency and department, regardless of where the employee assigns their hours in the timekeeping system. While the timesheet programmatic reflects the agency and department where hours and dollars are functionally charged, the payroll register aligns with the General Ledger based on home agency coding. As a result, the Payroll Register and General Ledger will reconcile with each other but may not align with programmatic reports, which are based on timesheet-level allocations. This system behavior is consistent with current configuration and financial reporting practices.
Assistance Listing Numbers 93.658 Foster Care Title IV-E 93.667 Social Services Block Grant Federal Agency U.S. Department of Health and Human Services Pass-Through Agency Wisconsin Department of Children and Families Award Numbers / Years Various Criteria: Per 2 CFR §200.430 - Compensation—personal services, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, are properly supported, and are consistent with the entity’s accounting records. Additionally, 2 CFR §200.303 - Internal Controls requires non-Federal entities to establish and maintain effective internal controls that provide reasonable assurance of compliance with Federal statutes, regulations, and terms and conditions of Federal awards. Condition/Context: As part of our testing procedures over payroll, we reconciled amounts recorded on the Payroll Ledger to the General Ledger for each payroll sample that we tested. From a sample of 40, we noted two instances where the amounts recorded in the General Ledger did not agree with the corresponding amounts recorded in the Payroll Ledger. Our sample was not statistically valid. Effect: Inaccurate or unsupported recording of payroll costs increases the risk that unallowable or misstated payroll expenses may be charged to Federal awards. If not corrected, this could result in inaccurate financial reporting and potential questioned costs. Questioned Costs: None noted. Cause: Payroll Ledger records are generated from programmatic reports based on timesheet entries in the county’s Dayforce system. While manual adjustments or allocations of programmatic reports to the Payroll Ledger are sometimes made before these records are ultimately posted to the General Ledger, no formal reconciliations are performed to account for these changes. As a result, discrepancies between the programmatic reports and the General Ledger are likely whenever there are adjustments or allocations in the programmatic reports which are not posted on the General Ledger. Recommendation: We recommend that management strengthen internal controls over payroll reconciliations by: • Implementing a system review process to ensure Payroll Ledger amounts reconcile to the General Ledger. • Conducting periodic reconciliations between the programmatic reports, Payroll Ledger and General Ledger and promptly investigating any discrepancies. • Providing training to accounting personnel on proper reconciliation procedures. Views of Responsible Officials: Dayforce is configured to allocate salary expenses to an employee’s home agency and department, regardless of where the employee assigns their hours in the timekeeping system. While the timesheet programmatic reflects the agency and department where hours and dollars are functionally charged, the payroll register aligns with the General Ledger based on home agency coding. As a result, the Payroll Register and General Ledger will reconcile with each other but may not align with programmatic reports, which are based on timesheet-level allocations. This system behavior is consistent with current configuration and financial reporting practices.
2024-002 Eligibility – METS Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ Social Security number and citizenship verification, as well as requirements of agencies to process applications within 45 days for most applicants, up to 60 days for certain applicants. Minnesota Statutes, Section 256B.05, requires county agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, METS, which is used by Watonwan County to support the eligibility determination process. In the case files tested for eligibility, not all documentation to support participant eligibility was updated or input correctly. The following exceptions were noted in the sample of 40 case files tested: • One participant’s Social Security number was entered incorrectly and not verified, and citizenship status was not verified. • One participant’s application was processed 199 days after receipt. Questioned Costs: Not applicable. Watonwan County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Watonwan County split the eligibility determination process. Generally, Watonwan County resolves eligibility issues when prompted by the system, while the State performs the initial review of the case files, including determining the information in METS is verified. Participants receive benefits from the State. The population consisted of 3,336 active METS cases enrolled in the Medical Assistance Program in 2024; the sample size was 40 case files. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The improper input or updating of information in METS and lack of verification of key eligibility-determining factors increase the risk that program participants will receive benefits when they are not eligible. Delays in processing applications increase the risk that program benefits will not be provided to those eligible to receive them. Cause: Program personnel indicated one of the case files was transferred from another county and the supporting documentation was not included in the information provided, and one case file was overlooked by the program personnel responsible for processing the information. Recommendation: We recommend Watonwan County implement additional procedures to provide reasonable assurance that all documentation needed to resolve eligibility issues exists and program personnel properly process applications as well as input, update, or verify the documentation in METS. In addition, Watonwan County should consider providing further training to program personnel. View of Responsible Official: Acknowledge
2024-003 Eligibility – MAXIS Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ citizenship and asset verification. Minnesota Statutes, Section 256B.05, requires county agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by Watonwan County to support the eligibility determination process. In the case files tested for eligibility, not all documentation to support participant eligibility was updated or input correctly. In a sample of 40 case files tested, two participants’ citizenship was not verified and one participants’ assets were not verified. Questioned Costs: Not applicable. Watonwan County administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and Watonwan County split the eligibility determination process. Pursuant to Minnesota statutes, Watonwan County performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. The population consisted of 572 active MAXIS cases enrolled in the Medical Assistance Program in 2024; the sample size was 40 case files. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The lack of verification in MAXIS of key eligibility-determining factors increases the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel responsible for resolving eligibility issues in MAXIS did not ensure all required information was verified. Recommendation: We recommend Watonwan County implement additional procedures to provide reasonable assurance that all documentation needed to support eligibility determinations exists, the program personnel properly input or update the documentation in MAXIS, and the program personnel follow up on issues in a timely manner. In addition, Watonwan County should consider providing further training to program personnel. View of Responsible Official: Acknowledge
2024-004 Reporting Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. For federal awards received from the Minnesota Department of Human Services (DHS), the County should establish and maintain internal control to provide assurance that program reports are completed in accordance with DHS reporting instructions. As part of Watonwan County’s federal award reporting requirements, the County submits the quarterly Local Collaborative Time Study (LCTS) Public Health Cost Schedule (DHS-3220.3) and the Annual Collaborative Report to DHS. Condition: The following exceptions were noted in the tested program reports: • Sampled DHS-3220.3 reports understated the federal funds cost pool by including state grant funds in the reported federal revenue offsets. In total, the two sampled reports understated the federal funds cost pool by $17,494. • The 2024 Annual Collaborative Report was submitted on July 2, 2025, which is after the due date of April 30, 2025. Questioned Costs: None. Context: DHS relies on accurate and timely reporting of program costs and activities to ensure that resulting grant funds paid to the County are for applicable federal program costs and activities as well as to provide detailed information necessary for maintaining proper oversight over federal programs. The population of program reports tested included four quarterly DHS-3220.3 reports; the sample was two quarterly DHS-3220.3 reports. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Inaccurate reports and late submission of reports can impair the DHS’s ability to provide required oversight over federal programs and can result in the County receiving either more or less federal funds than allowed based on the actual underlying activity. Cause: The County’s controls over preparation of the reports were not sufficient to identify the reporting errors and ensure timely reporting. Recommendation: We recommend Watonwan County implement controls that ensure that all DHS reports are completed accurately and in accordance with DHS instructions. We also recommend the County revise and resubmit any DHS-3220.3 reports permitted with federal revenue offset activity reported incorrectly. View of Responsible Official: Acknowledge
Finding 2024-003: Eligibility – Lack of Internal Controls Federal Program: Rural Rental Housing Loans – Assistance Lising #10.415 Federal Agency: U.S. Department of Agriculture - Rural Development Award Period: 2024 Finding resolution status Unresolved Information on universe and population size The universe consisted of tenant files of all tenants living in projects financed with rural rental housing loans (143) during the fiscal year. Sample size information 15 tenant files were reviewed. Identification as a repeat finding This is not a repeat finding. Criteria 2 CFR §200.303(c) requires non-Federal entities to establish and maintain effective internal controls over Federal awards that provide reasonable assurance of compliance with applicable laws, regulations, and program requirements. As a fundamental internal control principle, review of key financial and program compliance documents, including tenant certifications, should be performed by an individual independent from the preparer to prevent and detect errors or misstatements. Statement of condition During our testing of compliance for eligibility, we noted that the same employee was responsible for both preparing and reviewing the tenant files. Cause The organization has limited staffing resources, resulting in the assignment of incompatible duties to a single employee without sufficient compensating controls. Effect When the preparer is also the reviewer, the risk of undetected errors or omissions increases. This could result in inaccurate tenant certifications, noncompliance with RD program requirements, and potential misreporting of tenant eligibility or rental assistance amounts. Auditor non-compliance code S – Internal Control Deficiency Questioned costs None Views of responsible officials Management concurs with the finding and will take steps to resolve the material weakness. Context This issue was observed in the preparation and review process for RD Form 3560-8 and/or HUD Form 50058, where staffing limitations resulted in the same individuals both preparing and reviewing tenant certifications. Recommendation We recommend that the Authority establish procedures to ensure all RD Form 3560-8 and HUD Form 50058 submissions are subject to an independent review prior to submission.
2024-002 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Agriculture Program: 10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Award Number and Year: 242MN101S2514; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for the State Administrative Matching Grants for the Supplemental Nutrition Assistance Program are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: The following exceptions were noted in the sample of 40 expenditures tested: • One claim was reported as eligible expenditures but was not eligible for federal reimbursement. • Two claims included activity that was allocated on an incorrect full-time equivalent (FTE) split. • Three timesheets tested included payroll costs that were incorrectly reported as Income Maintenance Random Moments Time Studies participants payroll expense. Some of the items noted above are included in the Child Support Services Activities Allowed and Unallowed, Allowable Costs/Cost Principles finding (2024-004) and the Medical Assistance Program Activities Allowed and Unallowed, Allowable Costs/Cost Principles, and Reporting finding (2024-005). Questioned Costs: Questioned costs identified were less than $25,000. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to the Health and Human Services are for allowable federal program activities and costs and provide detailed information necessary for maintaining proper oversight over federal programs. Total expenditures reported on the SEFA are $827,634, consisting of 2,972 transactions. The sample of 40 transactions totaled $145,877. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The Health and Human Services’ controls over the identification of allowable activities and costs, preparation of the quarterly reports, and maintenance of payroll allocations in the accounting system were not sufficient to identify these errors. Recommendation: We recommend the Health and Human Services implement controls to ensure activities allowed and allowable costs are appropriately identified and reported to DHS in accordance with federal program guidance and DHS instructions. We also recommend the Health and Human Services correct and resubmit reports submitted with unallowable activities or costs, costs allocated incorrectly, or activity reported incorrectly. View of Responsible Official: Acknowledge
2024-003 Procurement, Suspension, and Debarment Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Agriculture Program: 10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Award Number and Year: 242MN101S2514; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.318(i) states that the Health and Human Services must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Additionally, the Health and Human Services must follow further federal guidance over full and open competition as provided in Title 2 U.S. Code of Federal Regulations § 200.319, and perform a cost or price analysis as provided in Title 2 U.S. Code of Federal Regulations § 200.324. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. Condition: The following exceptions were noted in the procurements testing: • All five small purchases tested did not have documentation of price or rate quotations obtained from an adequate number of qualified sources detailing the history of procurement or documentation of full and open competition. • For the five micro-purchase procurements tested, Southwest Health and Human Services did not document how purchases are distributed among qualified suppliers, as practical. • For one of the four covered transactions tested, the verification for suspended or debarred vendors was not performed before entering into the procurement. • For the one transaction over the simplified acquisition threshold tested, no documentation was maintained detailing the history of the procurement, demonstrating full and open competition, or that a cost or price analysis was performed. Questioned Costs: None. Context: The threshold used for the procurement testing was based on the Health and Human Services’ policy for simplified acquisition threshold (over $150,000), small purchases ($3,000 to $150,000), and micro-purchases ($3,000 or less). The suspension and debarment covered transaction threshold is $25,000. The population consisted of one procurement over the simplified acquisition threshold, 37 small purchases, 38 micro-purchases, and 18 covered transactions. The sample was one over the simplified acquisition threshold, five small purchases, five micro-purchases, and four covered transactions. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing and Single Audits. Effect: It cannot be determined that the contracting process was open and fair because the Health and Human Services did not document the rationale for the contractor selection. It also cannot be determined that an entity was not suspended, debarred, or otherwise excluded from conducting business with the Health and Human Services. Cause: Southwest Health and Human Services does not have processes in place to ensure federal requirements for procurement are followed. Recommendation: We recommend the Health and Human Services maintain documentation on the history of a procurement, provide for full and open competition, and perform a cost or price analysis to support compliance with Title 2 U.S. Code of Federal Regulations §§ 200.318, 200.319, and 200.324. We further recommend the Health and Human Services maintain documentation to demonstrate that vendors were not debarred, suspended, or otherwise excluded from conducting business with the Health and Human Services; this documentation should be completed prior to entering into a covered transaction. View of Responsible Official: Concur
2024-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: 2023-002 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.563 Child Support Services Award Number and Year: 2301MNCEST and 2301MNCSES, 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for Child Support Services are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: Five of the 40 expenditures selected for testing were allocated on an incorrect full-time equivalent (FTE) split or there was no documentation to support the allocation used. Some of the items are included in the State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Activities Allowed and Unallowed, Allowable Costs/Cost Principles finding (2024-002) and the Medical Assistance Program Activities Allowed and Unallowed, Allowable Costs/Cost Principles, and Reporting finding (2024-005). Questioned Costs: Questioned costs identified were less than $25,000. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to the Health and Human Services are for allowable federal program activities/costs and provide detailed information necessary for maintaining proper oversight over federal programs. Total expenditures reported on the SEFA are $838,835, consisting of 2,339 transactions. The sample of 40 transactions totaled $148,900. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The Health and Human Services’ controls over the identification of allowable activities and costs, preparation of the quarterly reports, and maintenance of payroll allocations in the accounting system were not sufficient to identify these errors. Recommendation: We recommend the Health and Human Services implement controls to ensure activities allowed and allowable costs are appropriately identified and reported to DHS in accordance with federal program guidance and DHS instructions. We also recommend the Health and Human Services correct and resubmit reports submitted with costs allocated incorrectly. View of Responsible Official: Acknowledge
2024-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles Prior Year Finding Number: 2023-002 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.563 Child Support Services Award Number and Year: 2301MNCEST and 2301MNCSES, 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for Child Support Services are submitted to the Minnesota Department of Human Services (DHS) through the DHS Income Maintenance DHS-2550 report on a quarterly basis. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: Five of the 40 expenditures selected for testing were allocated on an incorrect full-time equivalent (FTE) split or there was no documentation to support the allocation used. Some of the items are included in the State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Activities Allowed and Unallowed, Allowable Costs/Cost Principles finding (2024-002) and the Medical Assistance Program Activities Allowed and Unallowed, Allowable Costs/Cost Principles, and Reporting finding (2024-005). Questioned Costs: Questioned costs identified were less than $25,000. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to the Health and Human Services are for allowable federal program activities/costs and provide detailed information necessary for maintaining proper oversight over federal programs. Total expenditures reported on the SEFA are $838,835, consisting of 2,339 transactions. The sample of 40 transactions totaled $148,900. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The Health and Human Services’ controls over the identification of allowable activities and costs, preparation of the quarterly reports, and maintenance of payroll allocations in the accounting system were not sufficient to identify these errors. Recommendation: We recommend the Health and Human Services implement controls to ensure activities allowed and allowable costs are appropriately identified and reported to DHS in accordance with federal program guidance and DHS instructions. We also recommend the Health and Human Services correct and resubmit reports submitted with costs allocated incorrectly. View of Responsible Official: Acknowledge
2024-005 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Prior Year Finding Number: 2023-003 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM and 2405MN5MAP, 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for the Medical Assistance Program are submitted to DHS through the DHS Income Maintenance (DHS-2550) report, the Social Service Fund Report (DHS-2556), and Local Collaborative Time Study Cost Schedule Reports (DHS-3220) on a quarterly basis. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: The following exceptions were noted in the sample of 40 expenditures tested for activities allowed or unallowed and allowable costs/cost principles: • Two claims were incorrectly allocated in the DHS-2550 and Public Health DHS-3220 reports, which resulted in expenditures reported in the incorrect categories. • One claim reported on the DHS-2550 report included expenditures ineligible for federal grant reimbursement. • Two claims and two timesheets for a Minnesota Department of Public Safety program were included in the DHS-2556 report as eligible expenditures but were not eligible for federal reimbursement. • For four timesheets tested, the payroll costs were incorrectly coded according to the Income Maintenance Random Moments Time Studies and Social Services Time Studies. Some of the items are included in the Child Support Services Activities Allowed and Unallowed, Allowable Costs/Cost Principles finding (2024-002) and the State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Activities Allowed and Unallowed, Allowable Costs/Cost Principles finding (2024-004). In addition, the following exceptions were noted in the first and third quarter DHS reports tested for reporting: • The DHS-2550 and DHS-2556 reports improperly included interest on leased vehicles. • Depreciation expense was incorrectly reported on the DHS-2550 reports. • Payroll adjustments were made to the general ledger that were not reflected on the DHS-2550 and DHS-2556 reports. • Postage and fuel costs were not reported at the correct rates on the DHS-2550 and DHS-2556 reports. • The DHS-2556 reports incorrectly excluded Out of Home Placement Aid. • The DHS-2556 reports excluded IT costs that were eligible expenditures. Questioned Costs: Known questioned costs are $6,274; likely questioned costs are $51,942, for total questioned costs of $58,216. Known and likely questioned costs are calculated based on expenditures identified during testing that were included in the DHS reports and were either not eligible expenditures or were incorrectly allocated to the Medical Assistance Program. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to the Health and Human Services are for allowable federal program activities and costs and provide detailed information necessary for maintaining proper oversight over federal programs. Total expenditures reported on the SEFA are $2,837,564, consisting of 3,561 transactions. The sample of 40 transactions total $187,658. The reporting population consisted of four quarterly DHS-2550, DHS-2556, and Public Health DHS-3220 reports; the sample was two quarterly DHS-2550, DHS-2556, and Public Health DHS-3220 reports. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The Health and Human Services’ controls over the identification of allowable activities and costs, preparation and review of the quarterly reports, and maintenance of payroll allocations in the accounting system were not sufficient to identify these errors. Recommendation: We recommend the Health and Human Services implement controls to ensure activities allowed and allowable costs are appropriately identified and accurately reported to DHS in accordance with federal program guidance and DHS instructions. We also recommend the Health and Human Services correct and resubmit reports submitted with unallowable activities or costs, costs allocated incorrectly, or activity reporting incorrectly. View of Responsible Official: Acknowledge
2024-006 Eligibility – MAXIS Prior Year Finding Number: 2023-004 Year of Finding Origination: 2011 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM; 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 42 U.S. Code of Federal Regulations §§ 435.911 and 435.945 require the state Medicaid agency to determine and verify eligibility of enrollees in Medicaid. The Minnesota Department of Human Services provides the Minnesota Health Care Programs Eligibility Policy Manual. The manual contains the Minnesota Department of Human Services eligibility policies for the Minnesota Health Care Programs, including the eligibility requirements of Medical Assistance. Specific eligibility requirements are included for participants’ citizenship verification, income limits, and asset verification. Minnesota Statutes § 256B.05 requires agencies to administer Medical Assistance. Condition: The Minnesota Department of Human Services maintains the computer system, MAXIS, which is used by the Health and Human Services to support the eligibility determination process. In the case files reviewed for eligibility, not all documentation to support participant eligibility was available, updated, or input correctly. The following exceptions were noted in the sample of 40 case files tested: • Five case files did not have verification of citizenship; and two additional case files had verification of citizenship, but MAXIS was not properly updated. • One case file did not include support for the income listed in MAXIS. • Two case files included amounts for client accounts (assets) that were not properly updated or supported for the most recent application or renewal. Questioned Costs: Not applicable. The Health and Human Services administers the program, but the State of Minnesota pays benefits to participants in this program. Context: The State of Minnesota and the Health and Human Services split the eligibility determination process. Pursuant to Minnesota statutes, the Health and Human Services performs the “intake function” needed for this program, while the State maintains the MAXIS system, which supports the eligibility determination process. Participants receive benefit payments from the State. The population consisted of 3,804 active MAXIS cases enrolled in the Medical Assistance Program in 2024; the sample size was 40 case files. The sample size was based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The improper input or updating of information into MAXIS and the lack of verification or follow-up of eligibility-determining factors increase the risk that program participants will receive benefits when they are not eligible. Cause: Program personnel entering case file information into MAXIS did not ensure all required information was input or updated correctly, supported, or retained. Recommendation: We recommend Southwest Health and Human Services implement additional procedures to provide reasonable assurance that all necessary documentation to support eligibility determinations exists, the program personnel properly input or update the documentation in MAXIS, and the program personnel follow up on issues in a timely manner. In addition, Southwest Health and Human Services should consider providing further training to program personnel. View of Responsible Official: Acknowledge
2024-005 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Prior Year Finding Number: 2023-003 Year of Finding Origination: 2022 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Material Weakness and Modified Opinion Federal Agency: U.S. Department of Health and Human Services Program: 93.778 Medical Assistance Program Award Number and Year: 2405MN5ADM and 2405MN5MAP, 2024 Pass-Through Agency: Minnesota Department of Human Services Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Administrative program costs for the Medical Assistance Program are submitted to DHS through the DHS Income Maintenance (DHS-2550) report, the Social Service Fund Report (DHS-2556), and Local Collaborative Time Study Cost Schedule Reports (DHS-3220) on a quarterly basis. DHS provides reporting instructions, including information regarding eligible and ineligible costs. Condition: The following exceptions were noted in the sample of 40 expenditures tested for activities allowed or unallowed and allowable costs/cost principles: • Two claims were incorrectly allocated in the DHS-2550 and Public Health DHS-3220 reports, which resulted in expenditures reported in the incorrect categories. • One claim reported on the DHS-2550 report included expenditures ineligible for federal grant reimbursement. • Two claims and two timesheets for a Minnesota Department of Public Safety program were included in the DHS-2556 report as eligible expenditures but were not eligible for federal reimbursement. • For four timesheets tested, the payroll costs were incorrectly coded according to the Income Maintenance Random Moments Time Studies and Social Services Time Studies. Some of the items are included in the Child Support Services Activities Allowed and Unallowed, Allowable Costs/Cost Principles finding (2024-002) and the State Administrative Matching Grants for the Supplemental Nutrition Assistance Program Activities Allowed and Unallowed, Allowable Costs/Cost Principles finding (2024-004). In addition, the following exceptions were noted in the first and third quarter DHS reports tested for reporting: • The DHS-2550 and DHS-2556 reports improperly included interest on leased vehicles. • Depreciation expense was incorrectly reported on the DHS-2550 reports. • Payroll adjustments were made to the general ledger that were not reflected on the DHS-2550 and DHS-2556 reports. • Postage and fuel costs were not reported at the correct rates on the DHS-2550 and DHS-2556 reports. • The DHS-2556 reports incorrectly excluded Out of Home Placement Aid. • The DHS-2556 reports excluded IT costs that were eligible expenditures. Questioned Costs: Known questioned costs are $6,274; likely questioned costs are $51,942, for total questioned costs of $58,216. Known and likely questioned costs are calculated based on expenditures identified during testing that were included in the DHS reports and were either not eligible expenditures or were incorrectly allocated to the Medical Assistance Program. Context: DHS relies on accurate identification and reporting of program costs to ensure grant funds paid to the Health and Human Services are for allowable federal program activities and costs and provide detailed information necessary for maintaining proper oversight over federal programs. Total expenditures reported on the SEFA are $2,837,564, consisting of 3,561 transactions. The sample of 40 transactions total $187,658. The reporting population consisted of four quarterly DHS-2550, DHS-2556, and Public Health DHS-3220 reports; the sample was two quarterly DHS-2550, DHS-2556, and Public Health DHS-3220 reports. The sample sizes were based on the guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: Errors in the identification and reporting of costs on the quarterly reports can impair DHS’ ability to provide required oversight over federal programs and result in the County receiving either more or less federal funds than justified based on the actual underlying activity. Cause: The Health and Human Services’ controls over the identification of allowable activities and costs, preparation and review of the quarterly reports, and maintenance of payroll allocations in the accounting system were not sufficient to identify these errors. Recommendation: We recommend the Health and Human Services implement controls to ensure activities allowed and allowable costs are appropriately identified and accurately reported to DHS in accordance with federal program guidance and DHS instructions. We also recommend the Health and Human Services correct and resubmit reports submitted with unallowable activities or costs, costs allocated incorrectly, or activity reporting incorrectly. View of Responsible Official: Acknowledge
Finding 2024-001 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care, Grants for New and Expanded Services Under the Health Center Program, and COVID-19 - Grants for New and Expanded Services Under the Health Center Program; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Assistance Listing Numbers: 93.224, 93.527, and 93.918 Federal Award Identification Numbers and Years: Health Center Program Cluster: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, and H8KCS49691 - 2024; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: H76HA00521 - 2023, and H76HA00521 - 2024 Criteria 1. In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA subaward report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition Health Center Program Cluster: 1. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 2 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $4,153,728 $0 $4,153,728 $0 $0 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. During our audit, we noted the evidence of review and approval was performed after the FFATA subaward was submitted to the FSRS. 3. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 1 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $191,710 $0 $191,710 $0 $0 Cause Health Center Program Cluster: 1. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 3. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Health Center Program Cluster: Two exceptions from a statistically valid sample of two. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: One exception from a statistically valid sample of one. Identification as Repeat Finding Health Center Program Cluster: 1. Yes (see prior year finding number 2023-002) Recommendation Health Center Program Cluster: 1. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. We recommend that all FFATA reports be reviewed and approved by the CFO or designee before submission to FSRS and evidence of approval be maintained. 3. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials Health Center Program Cluster: 1. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. BCHN has begun a process where the FFATA report is put together by the Finance Manager and reviewed and signed off by the CFO before submitting the report. 3. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed.
Finding 2024-003 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or unallowable costs being charged. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding Yes (see prior year finding number 2023-004) Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-004 - Period of Performance - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or costs not incurred within the period of performance. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding This finding is not a repeat finding. Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-001 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care, Grants for New and Expanded Services Under the Health Center Program, and COVID-19 - Grants for New and Expanded Services Under the Health Center Program; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Assistance Listing Numbers: 93.224, 93.527, and 93.918 Federal Award Identification Numbers and Years: Health Center Program Cluster: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, and H8KCS49691 - 2024; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: H76HA00521 - 2023, and H76HA00521 - 2024 Criteria 1. In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA subaward report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition Health Center Program Cluster: 1. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 2 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $4,153,728 $0 $4,153,728 $0 $0 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. During our audit, we noted the evidence of review and approval was performed after the FFATA subaward was submitted to the FSRS. 3. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 1 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $191,710 $0 $191,710 $0 $0 Cause Health Center Program Cluster: 1. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 3. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Health Center Program Cluster: Two exceptions from a statistically valid sample of two. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: One exception from a statistically valid sample of one. Identification as Repeat Finding Health Center Program Cluster: 1. Yes (see prior year finding number 2023-002) Recommendation Health Center Program Cluster: 1. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. We recommend that all FFATA reports be reviewed and approved by the CFO or designee before submission to FSRS and evidence of approval be maintained. 3. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials Health Center Program Cluster: 1. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. BCHN has begun a process where the FFATA report is put together by the Finance Manager and reviewed and signed off by the CFO before submitting the report. 3. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed.
Finding 2024-003 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or unallowable costs being charged. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding Yes (see prior year finding number 2023-004) Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-004 - Period of Performance - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or costs not incurred within the period of performance. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding This finding is not a repeat finding. Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-001 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care, Grants for New and Expanded Services Under the Health Center Program, and COVID-19 - Grants for New and Expanded Services Under the Health Center Program; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Assistance Listing Numbers: 93.224, 93.527, and 93.918 Federal Award Identification Numbers and Years: Health Center Program Cluster: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, and H8KCS49691 - 2024; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: H76HA00521 - 2023, and H76HA00521 - 2024 Criteria 1. In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA subaward report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition Health Center Program Cluster: 1. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 2 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $4,153,728 $0 $4,153,728 $0 $0 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. During our audit, we noted the evidence of review and approval was performed after the FFATA subaward was submitted to the FSRS. 3. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 1 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $191,710 $0 $191,710 $0 $0 Cause Health Center Program Cluster: 1. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 3. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Health Center Program Cluster: Two exceptions from a statistically valid sample of two. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: One exception from a statistically valid sample of one. Identification as Repeat Finding Health Center Program Cluster: 1. Yes (see prior year finding number 2023-002) Recommendation Health Center Program Cluster: 1. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. We recommend that all FFATA reports be reviewed and approved by the CFO or designee before submission to FSRS and evidence of approval be maintained. 3. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials Health Center Program Cluster: 1. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. BCHN has begun a process where the FFATA report is put together by the Finance Manager and reviewed and signed off by the CFO before submitting the report. 3. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed.
Finding 2024-003 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or unallowable costs being charged. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding Yes (see prior year finding number 2023-004) Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-004 - Period of Performance - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or costs not incurred within the period of performance. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding This finding is not a repeat finding. Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-001 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care, Grants for New and Expanded Services Under the Health Center Program, and COVID-19 - Grants for New and Expanded Services Under the Health Center Program; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Assistance Listing Numbers: 93.224, 93.527, and 93.918 Federal Award Identification Numbers and Years: Health Center Program Cluster: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, and H8KCS49691 - 2024; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: H76HA00521 - 2023, and H76HA00521 - 2024 Criteria 1. In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA subaward report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition Health Center Program Cluster: 1. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 2 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $4,153,728 $0 $4,153,728 $0 $0 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. During our audit, we noted the evidence of review and approval was performed after the FFATA subaward was submitted to the FSRS. 3. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 1 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $191,710 $0 $191,710 $0 $0 Cause Health Center Program Cluster: 1. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 3. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Health Center Program Cluster: Two exceptions from a statistically valid sample of two. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: One exception from a statistically valid sample of one. Identification as Repeat Finding Health Center Program Cluster: 1. Yes (see prior year finding number 2023-002) Recommendation Health Center Program Cluster: 1. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. We recommend that all FFATA reports be reviewed and approved by the CFO or designee before submission to FSRS and evidence of approval be maintained. 3. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials Health Center Program Cluster: 1. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. BCHN has begun a process where the FFATA report is put together by the Finance Manager and reviewed and signed off by the CFO before submitting the report. 3. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed.
Finding 2024-003 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or unallowable costs being charged. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding Yes (see prior year finding number 2023-004) Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-004 - Period of Performance - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or costs not incurred within the period of performance. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding This finding is not a repeat finding. Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.
Finding 2024-001 - Reporting: Federal Funding Accountability and Transparency Act ("FFATA") - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care, Grants for New and Expanded Services Under the Health Center Program, and COVID-19 - Grants for New and Expanded Services Under the Health Center Program; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Assistance Listing Numbers: 93.224, 93.527, and 93.918 Federal Award Identification Numbers and Years: Health Center Program Cluster: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, and H8KCS49691 - 2024; Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: H76HA00521 - 2023, and H76HA00521 - 2024 Criteria 1. In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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. Under the requirements of the FFATA (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, prime recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The prime recipient is required to file a FFATA subaward report by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. Condition Health Center Program Cluster: 1. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 2 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $4,153,728 $0 $4,153,728 $0 $0 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. During our audit, we noted the evidence of review and approval was performed after the FFATA subaward was submitted to the FSRS. 3. During our audit, we noted the FFATA subawards were not submitted timely to the FSRS. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 1 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $191,710 $0 $191,710 $0 $0 Cause Health Center Program Cluster: 1. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. There is no formal policy in place requiring the CFO (or designee) to review and approve the FFATA reports before submission to the FSRS. 3. As a result of personnel changes within the finance department, the FFATA reporting was not done timely. Effect or Potential Effect 1. The condition could result in key data elements inaccurately reported and/or not supported by the source documentation. 2. The FFATA subawards were not submitted timely to the FSRS. Questioned Costs None. Context Health Center Program Cluster: Two exceptions from a statistically valid sample of two. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: One exception from a statistically valid sample of one. Identification as Repeat Finding Health Center Program Cluster: 1. Yes (see prior year finding number 2023-002) Recommendation Health Center Program Cluster: 1. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. We recommend that all FFATA reports be reviewed and approved by the CFO or designee before submission to FSRS and evidence of approval be maintained. 3. We recommend that management create an e-mail reminder or other alert mechanism and implement controls to ensure compliance with the reporting requirements under FFATA. Views of Responsible Officials Health Center Program Cluster: 1. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed. Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease: 2. BCHN has begun a process where the FFATA report is put together by the Finance Manager and reviewed and signed off by the CFO before submitting the report. 3. BCHN has created a policy regarding the FFATA reporting process. In this process the Electronic Handbook (EHB) is reviewed weekly to ensure that if new awarded funding is released, BCHN is alerted to the need to complete the FFATA report. BCHN has created a spreadsheet to track all the awarded funding and due dates for FFATA reports. Every month, at the board meeting, the spreadsheet is presented to the board with any new awarded funding and when the FFATA report is completed.
FINDING 2024-002 Subject: Economic Development Cluster - Reporting Federal Agency: Department of Commerce Federal Program: Economic Adjustment Assistance Assistance Listings Number: 11.307 Federal Award Number and Year (or Other Identifying Number): 06-79-06420 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context An effective system of internal controls was not in place at the City in order to ensure compliance with the grant agreement and the reporting compliance requirement. The grant agreement for the City's construction project states that the City is to submit a Federal Financial Report (SF-425) on a semi-annual basis. The SF-425 report includes, among other line items: cash receipts, cash disbursements, cash on hand, total federal funds authorized, and total recipient share required. Both of the submitted SF-425 reports were tested. Additionally, the City was required to submit progress reports on a quarterly basis. Two of the quarterly reports were selected for testing. Both the SF-425 reports and the quarterly progress reports were prepared and submitted by one employee of the City. Evidence of an established internal control over the reports tested was not available for audit. The data submitted in the SF-425 report submitted by the City for the reporting period ending on September 30, 2024, contained the following errors: Cash receipts were understated by $1,037,155. INDIANA STATE BOARD OF ACCOUNTS 19 CITY OF KOKOMO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cash disbursements were understated by $1,037,155. The lack of internal controls and noncompliance was isolated to the award 06-79-06420, EDA-Davis Road construction project. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following (see §§ 200.334, 200.335, 200.336, and 200.337): (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (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 and 200.329. If a Federal awarding agency requires reporting on an accrual basis from a recipient that maintains its records on other than an accrual basis, the recipient must not be required to establish an accrual accounting system. This recipient may develop accrual data for its reports on the basis of an analysis of the documentation on hand. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. . . ." Cause Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. The errors were due to federal reimbursements not being included as cash receipts and cash disbursements in the SF-425 reports. INDIANA STATE BOARD OF ACCOUNTS 20 CITY OF KOKOMO SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the City could not ensure that the reports submitted were accurate. In addition, not meeting the Economic Development Cluster reporting requirements increases the likelihood that the public will not have access to transparent and accurate information regarding expenditures of federal awards. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City design and implement a proper system of internal controls, including policies and procedures, to ensure that the City provides the Department of Commerce with complete and accurate information for the SF-425 and quarterly reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: CDBG - Entitlement/Special Purpose Grants Cluster - Internal Control Federal Agency: Department of Housing and Urban Development Federal Programs: Community Development Block Grants/Entitlement Grants, COVID-19 Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B11MN180005, B21MC180005, B22MC180005, B23MC180005, B20MW180005 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the City in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Recipients are required to submit FFATA (Federal Funding Accountability and Transparency Act) Reports that are input into the FSRS (Federal Subaward Reporting System) database based on subrecipient agreements. The City did not have an oversight or review process in place to ensure the required reports were submitted timely, accurately, and completely. The reports were generated and submitted by one individual, without a review or oversight process to detect and correct errors prior to submission. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The City's management did not have properly designed internal controls in place to review reports prior to submission. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF GARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the City cannot ensure that the reports submitted are materially accurate and correct. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the City design and implement a proper system of internal controls, including a segregation of duties, to ensure the accuracy of the FFATA Reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: CDBG - Entitlement/Special Purpose Grants Cluster - Internal Control Federal Agency: Department of Housing and Urban Development Federal Programs: Community Development Block Grants/Entitlement Grants, COVID-19 Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B11MN180005, B21MC180005, B22MC180005, B23MC180005, B20MW180005 Compliance Requirement: Reporting Audit Finding: Significant Deficiency Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-003. Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the City in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Recipients are required to submit FFATA (Federal Funding Accountability and Transparency Act) Reports that are input into the FSRS (Federal Subaward Reporting System) database based on subrecipient agreements. The City did not have an oversight or review process in place to ensure the required reports were submitted timely, accurately, and completely. The reports were generated and submitted by one individual, without a review or oversight process to detect and correct errors prior to submission. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The City's management did not have properly designed internal controls in place to review reports prior to submission. INDIANA STATE BOARD OF ACCOUNTS 22 CITY OF GARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the City cannot ensure that the reports submitted are materially accurate and correct. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the management of the City design and implement a proper system of internal controls, including a segregation of duties, to ensure the accuracy of the FFATA Reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-004 Subject: Congressionally Recommended Awards - Procurement and Suspension and Debarment Federal Agency: Department of Justice Federal Program: Congressionally Recommended Awards Assistance Listings Number: 16.753 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Modified Opinion Condition and Context Prior to entering into subawards and covered transactions with the award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (e.g., grant agreement) that are expended to equal or exceed $25,000 and all subawards. The verification is to be done by checking the System for Award Management (SAM) Excluded Parties List System (EPLS), collecting a certification from the person or entity, or adding a clause or condition to the covered transaction with that person or entity. One covered transaction paid from the award funds during the audit period was identified and tested. The covered transaction, totaling $999,998, did not include the appropriate provisions in the contract, nor did the City require a certification or check the SAM EPLS to ensure the entity was not suspended or debarred prior to making payment. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 23 CITY OF GARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (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). . . ." 31 CFR 19.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause Management of the City did not follow their formalized suspension and debarment policy to ensure procedures related to suspension and debarment were in place and followed. Effect Without the proper implementation of an effectively designed system of internal controls, the City could not ensure the vendors paid with federal funds were eligible to participate in federal programs. Any program funds the City used to pay vendors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls and follow policies and procedures to ensure contractors and subrecipients, as appropriate, are not suspended, debarred, or otherwise excluded prior to entering into contracts or subawards. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-005 Subject: Congressionally Recommended Awards - Internal Control Federal Agency: Department of Justice Federal Program: Congressionally Recommended Awards Assistance Listings Number: 16.753 Federal Award Number and Year (or Other Identifying Number): FY2024 Compliance Requirement: Reporting Audit Finding: Material Weakness Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the City in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Recipients are required to submit semiannual performance reports along with quarterly financial reports based on grant activity. The City did not have an oversight or review process in place to ensure the required reports were submitted timely, accurately, and completely. The reports were generated and submitted by one individual, without a review or oversight process to detect and correct errors prior to submission. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause The City's management did not have properly designed internal controls in place to review reports prior to submission. Effect Without the proper implementation of an effectively designed system of internal controls over reporting, the City cannot ensure that the reports submitted are materially accurate and correct. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 25 CITY OF GARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the management of the City design and implement a proper system of internal controls, including a segregation of duties, to ensure the accuracy of the semiannual performance reports and quarterly financial reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-006 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY2023 Compliance Requirement: Reporting Audit Findings: Material Weakness, Other Matters Condition and Context Recipients are required to submit quarterly or annual Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The City was classified as a metropolitan city with a population below 250,000 residents that received an allocation of more than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds. The quarterly reports were to cover one calendar quarter and must be submitted to the Treasury by the last day of the month following the end of the period covered. The City submitted all required P&E reports during the audit period. The internal controls in place were not effective and did not prevent, or detect and correct, errors in the P&E reports prior to submission. In a test of two of the four submitted reports, errors were identified as noted below: Quarter 2 report (April 1, 2024 to June 30, 2024) • The Total Cumulative Expenditures reported were understated by $2,185,409. Quarter 3 report (July 1, 2024 to September 30, 2024) • The Total Cumulative Expenditures reported were understated by $2,366,082. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 26 CITY OF GARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.328 states: "Unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMBapproved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award, but no less frequently than annually nor more frequently than quarterly except in unusual circumstances, for example where more frequent reporting is necessary for the effective monitoring of the Federal award or could significantly affect program outcomes, and preferably in coordination with performance reporting. The Federal awarding agency must use OMBapproved common information collections, as applicable, when providing financial and performance reporting information." 31 CFR 35.4(c) states: "Reporting and requests for other information. During the period of performance, recipients shall provide to the Secretary or her delegate, as applicable, periodic reports providing detailed accounting of the uses of funds, modifications to a State or Territory's tax revenue sources, and such other information as the Secretary or her delegate, as applicable, may require for the administration of this section. In addition to regular reporting requirements, the Secretary may request other additional information as may be necessary or appropriate, including as may be necessary to prevent evasions of the requirements of this subpart. False statements or claims made to the Secretary may result in criminal, civil, or administrative sanctions, including fines, imprisonment, civil damages and penalties, debarment from participating in Federal awards or contracts, and/or any other remedy available by law." Cause The City's management did not have effective internal controls in place to ensure proper amounts were reported prior to submission. A consultant prepared the reports based on calculations from a spreadsheet, which did not agree to the City's ledgers due to timing and reconciling differences. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of federal funding to the City. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 27 CITY OF GARY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the City strengthen its system of internal controls over the preparation and review of federal reports to ensure appropriate reviews, approvals, and oversight are effective in preventing, or detecting and correcting, noncompliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: Per 2 CFR 200.303, non-Federal entities must establish and maintain effective internal control over Federal awards that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the award. Controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” (Green Book) and the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During the audit, we noted that the Organization lacked documented internal controls over compliance in several key areas, including disbursements/expenditures, payroll, and progress reporting. Specifically, there was insufficient evidence of review and approval processes during the period from the beginning of the fiscal year through March 2024. In April 2024, the Organization implemented written policies and formalized internal controls; however, these were not retroactively applied to transactions prior to that date. Cause: The Organization had not previously developed or implemented formal written policies and procedures to document control activities, such as review and approval of expenditures and programmatic reporting, due in part to limited staffing and evolving compliance infrastructure. Effect: The absence of documented internal controls increased the risk of noncompliance with Federal program requirements related to allowable costs, payroll documentation, and performance reporting. Questioned Cost: None identified. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization continue to enforce and refine the internal controls implemented in April 2024 to ensure consistent documentation of review and approval for expenditures, payroll, and reporting. Furthermore, we encourage management to conduct periodic internal reviews to confirm that controls are functioning as intended across all departments handling Federal awards. Views of Responsible Officials and Planned Corrective Action (unaudited): See Corrective Action Plan.
Criteria or Specific Requirement: Per 2 CFR § 200.303 (a), non-Federal entities 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: The required SF-271 report was not submitted timely and was submitted after being requested for the audit. The required SF-425 report was not accurately completed and not submitted. Questioned Costs: None. Context: The Town did not submit the required grant reporting in a timely manner. Cause: The Town does not have adequate policies in place to ensure accurate and timely financial reporting for federal awards. Effect: The Town was not in compliance with the financial reporting requirements. Repeat Finding: No. Recommendation: The Town should continue its efforts to strengthen internal controls to ensure continuous monitoring and review of project obligations resulting in reports that are submitted in compliance with the grant requirements. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding. The Town’s grants team will continue to work with departments and any outside consultants to ensure reporting is completed timely and accurately.
Criteria or Specific Requirement: Per 2 CFR § 200.303 (a), non-Federal entities 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: The required SF-271 report was not submitted timely and was submitted after being requested for the audit. The required SF-425 report was not accurately completed and not submitted. Questioned Costs: None. Context: The Town did not submit the required grant reporting in a timely manner. Cause: The Town does not have adequate policies in place to ensure accurate and timely financial reporting for federal awards. Effect: The Town was not in compliance with the financial reporting requirements. Repeat Finding: No. Recommendation: The Town should continue its efforts to strengthen internal controls to ensure continuous monitoring and review of project obligations resulting in reports that are submitted in compliance with the grant requirements. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the finding. The Town’s grants team will continue to work with departments and any outside consultants to ensure reporting is completed timely and accurately.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.
Federal Agency: Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: SC-110351 - 2024 SC-111132 - 2024 SC-110353 - 2024 SC-111134 - 2024 SC-110355 - 2024 SC-110349 - 2024 SC-111130 - 2024 Pass-Through Agency: Pierce County Pass-Through Number(s): LP9XHDGASCJ3 Award Period: SC-110351: 7/1/23-6/30/24 SC-111132: 7/1/24-6/30/25 SC-110353: 12/1/23-11/30/24 SC-111134: 12/1/24-11/30/25 SC-110355: 6/1/23-8/31/24 SC-110349: 5/1/23-4/30/24 SC-111130: 5/1/24-4/30/25 Type of finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303(a), recipients of federal funds must "establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred (2 CFR sections 200.212 and 200.318(h); 2 CFR section 1800.30; 48 CFR section 52.209-6). Additionally, an entity is required to have policies and procedures in place for verifying the above requirements. Condition: During our suspension and debarment testing, CLA noted no suspension and debarment policy in place and no suspension and debarment check was performed over a covered transaction. Questioned costs: $7,442 of known questioned costs. Context: There was only one covered transaction subject to suspension and debarment check that had a contract amount exceeding $25,000 but only $7,442 was paid with federal program. However, no suspension and debarment check was performed. CLA elected to perform a SAM.gov check and noted that vendor (Locke System) is not debarred as of the date of the audit procedure. Cause: Share & Care House and Subsidiary lacks sufficient understanding of the compliance requirements surrounding covered transactions and suspension and debarment check requirements. Effect: Contracts could be entered into with suspended or debarred vendors leading to noncompliance. Improper understanding caused Share & Care House and Subsidiary to be noncompliant with program requirements over suspension and debarment. Repeat finding: No. Recommendation: CLA recommends Share & Care House and Subsidiary to develop and implement a suspension and debarment policy that meets the requirements outlined in Uniform Guidance. CLA also recommends increased training for those individuals involved in procurement and contract approval process to ensure suspension and debarment checks are performed on all covered transactions. Views of responsible officials: Management agrees with the finding and has provided its corrective action plan.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.231, 14.267, 93.224 & 93.527 Program: Emergency Solutions Grant Program, Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HH-21-03.4, CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18, H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in Subpart E 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Further, matching funds must also be allowable under Subpart E – Cost Principles. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the recipient or subrecipient; and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient’s or subrecipient’s written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient’s or subrecipient’s system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: We noted that the Village allocated payroll expenditures to Emergency Solutions Grants Program, Continuum of Care Program, and Health Center Cluster during 2024 that lacked adequate or timely documentation. During our testing we noted instances where supervisor did not approve timesheets, instances where the incorrect allocation rate was utilized, and instances where attestations were not completed timely to support employee’s time allocated to the grant for reimbursement. • For Emergency Solutions Grants Program: o 41 out of 60 selections did not have timely completion of attestations • For Continuum of Care Program: o 2 out of 100 selections utilized the incorrect allocation rate to the grant. • For Continuum of Care Program in our testing of Matching Costs: o 2 out of 60 selections did not have approved timesheets. o 2 out of 60 selections did not have timely completion of attestations. o 1 out of 60 selections utilized the incorrect allocation rate. • For Health Center Program Cluster: o 1 out of 60 selections utilized the incorrect allocation rate to the grant. o 14 out of 60 selections did not have timely completion of attestations. Cause: The Village did not have adequate policies/procedures in place to timely prepare and complete timesheet attestations and approvals and reconcile to actual expenditures charged. Additionally, the Village relied heavily on manual processes that are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls in place to detect calculation errors and ensure attestations and timesheets were reviewed in a timely manner, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grants Program: None Continuum of Care Program Known Questioned Costs: $1,575 Continuum of Care Program Likely Questioned Costs: $172,053 Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2024 were $377,797. Payroll costs including fringe benefits for the Continuum of Care Program in 2024 were $1,217,865. Matching costs for the Continuum of Care Program in 2024 were $1,896,728. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Repeat Finding: 2023-003, 2023-004, 2023-005 Recommendation: We recommend that the Village implement policies and procedures to ensure attestations are completed timely (i.e. quarterly) and to ensure timely review for any necessary budget to actual adjustments. Additionally, we recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.231, 14.267, 93.224 & 93.527 Program: Emergency Solutions Grant Program, Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HH-21-03.4, CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18, H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in Subpart E 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Further, matching funds must also be allowable under Subpart E – Cost Principles. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the recipient or subrecipient; and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient’s or subrecipient’s written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient’s or subrecipient’s system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: We noted that the Village allocated payroll expenditures to Emergency Solutions Grants Program, Continuum of Care Program, and Health Center Cluster during 2024 that lacked adequate or timely documentation. During our testing we noted instances where supervisor did not approve timesheets, instances where the incorrect allocation rate was utilized, and instances where attestations were not completed timely to support employee’s time allocated to the grant for reimbursement. • For Emergency Solutions Grants Program: o 41 out of 60 selections did not have timely completion of attestations • For Continuum of Care Program: o 2 out of 100 selections utilized the incorrect allocation rate to the grant. • For Continuum of Care Program in our testing of Matching Costs: o 2 out of 60 selections did not have approved timesheets. o 2 out of 60 selections did not have timely completion of attestations. o 1 out of 60 selections utilized the incorrect allocation rate. • For Health Center Program Cluster: o 1 out of 60 selections utilized the incorrect allocation rate to the grant. o 14 out of 60 selections did not have timely completion of attestations. Cause: The Village did not have adequate policies/procedures in place to timely prepare and complete timesheet attestations and approvals and reconcile to actual expenditures charged. Additionally, the Village relied heavily on manual processes that are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls in place to detect calculation errors and ensure attestations and timesheets were reviewed in a timely manner, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grants Program: None Continuum of Care Program Known Questioned Costs: $1,575 Continuum of Care Program Likely Questioned Costs: $172,053 Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2024 were $377,797. Payroll costs including fringe benefits for the Continuum of Care Program in 2024 were $1,217,865. Matching costs for the Continuum of Care Program in 2024 were $1,896,728. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Repeat Finding: 2023-003, 2023-004, 2023-005 Recommendation: We recommend that the Village implement policies and procedures to ensure attestations are completed timely (i.e. quarterly) and to ensure timely review for any necessary budget to actual adjustments. Additionally, we recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.231, 14.267, 93.224 & 93.527 Program: Emergency Solutions Grant Program, Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HH-21-03.4, CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18, H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in Subpart E 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Further, matching funds must also be allowable under Subpart E – Cost Principles. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the recipient or subrecipient; and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient’s or subrecipient’s written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient’s or subrecipient’s system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: We noted that the Village allocated payroll expenditures to Emergency Solutions Grants Program, Continuum of Care Program, and Health Center Cluster during 2024 that lacked adequate or timely documentation. During our testing we noted instances where supervisor did not approve timesheets, instances where the incorrect allocation rate was utilized, and instances where attestations were not completed timely to support employee’s time allocated to the grant for reimbursement. • For Emergency Solutions Grants Program: o 41 out of 60 selections did not have timely completion of attestations • For Continuum of Care Program: o 2 out of 100 selections utilized the incorrect allocation rate to the grant. • For Continuum of Care Program in our testing of Matching Costs: o 2 out of 60 selections did not have approved timesheets. o 2 out of 60 selections did not have timely completion of attestations. o 1 out of 60 selections utilized the incorrect allocation rate. • For Health Center Program Cluster: o 1 out of 60 selections utilized the incorrect allocation rate to the grant. o 14 out of 60 selections did not have timely completion of attestations. Cause: The Village did not have adequate policies/procedures in place to timely prepare and complete timesheet attestations and approvals and reconcile to actual expenditures charged. Additionally, the Village relied heavily on manual processes that are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls in place to detect calculation errors and ensure attestations and timesheets were reviewed in a timely manner, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grants Program: None Continuum of Care Program Known Questioned Costs: $1,575 Continuum of Care Program Likely Questioned Costs: $172,053 Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2024 were $377,797. Payroll costs including fringe benefits for the Continuum of Care Program in 2024 were $1,217,865. Matching costs for the Continuum of Care Program in 2024 were $1,896,728. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Repeat Finding: 2023-003, 2023-004, 2023-005 Recommendation: We recommend that the Village implement policies and procedures to ensure attestations are completed timely (i.e. quarterly) and to ensure timely review for any necessary budget to actual adjustments. Additionally, we recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. Views of Responsible Officials:
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.231, 14.267, 93.224 & 93.527 Program: Emergency Solutions Grant Program, Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HH-21-03.4, CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18, H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in Subpart E 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Further, matching funds must also be allowable under Subpart E – Cost Principles. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the recipient or subrecipient; and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient’s or subrecipient’s written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient’s or subrecipient’s system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: We noted that the Village allocated payroll expenditures to Emergency Solutions Grants Program, Continuum of Care Program, and Health Center Cluster during 2024 that lacked adequate or timely documentation. During our testing we noted instances where supervisor did not approve timesheets, instances where the incorrect allocation rate was utilized, and instances where attestations were not completed timely to support employee’s time allocated to the grant for reimbursement. • For Emergency Solutions Grants Program: o 41 out of 60 selections did not have timely completion of attestations • For Continuum of Care Program: o 2 out of 100 selections utilized the incorrect allocation rate to the grant. • For Continuum of Care Program in our testing of Matching Costs: o 2 out of 60 selections did not have approved timesheets. o 2 out of 60 selections did not have timely completion of attestations. o 1 out of 60 selections utilized the incorrect allocation rate. • For Health Center Program Cluster: o 1 out of 60 selections utilized the incorrect allocation rate to the grant. o 14 out of 60 selections did not have timely completion of attestations. Cause: The Village did not have adequate policies/procedures in place to timely prepare and complete timesheet attestations and approvals and reconcile to actual expenditures charged. Additionally, the Village relied heavily on manual processes that are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls in place to detect calculation errors and ensure attestations and timesheets were reviewed in a timely manner, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grants Program: None Continuum of Care Program Known Questioned Costs: $1,575 Continuum of Care Program Likely Questioned Costs: $172,053 Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2024 were $377,797. Payroll costs including fringe benefits for the Continuum of Care Program in 2024 were $1,217,865. Matching costs for the Continuum of Care Program in 2024 were $1,896,728. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Repeat Finding: 2023-003, 2023-004, 2023-005 Recommendation: We recommend that the Village implement policies and procedures to ensure attestations are completed timely (i.e. quarterly) and to ensure timely review for any necessary budget to actual adjustments. Additionally, we recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. Views of Responsible Officials: