2024-015 Program: Medicaid Cluster, Foster Care Title IV-E, Temporary Assistance for Needy Families, Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.778, 93.658, 93.558, 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.413(c)(1), Direct Costs, state that direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as direct or indirect costs. 2 CFR Section 200.416(b), Cost Allocation Plans and Indirect Cost Proposals, states that individual departments typically charge Federal awards for indirect costs through an indirect cost rate. A separate indirect cost rate proposal for each operating department is usually necessary to claim indirect costs under Federal awards. Indirect costs include (1) the indirect costs originating in each operating department of the State, local government, or Indian Tribe carrying out Federal awards; and (2) the costs of central governmental services distributed through the central service cost allocation plan and not otherwise treated as direct costs. Condition: During our testing of pooled costs claimed through County Expense Claims, we noted that one (1) of forty (40) transactions was not a department cost that should have been included in the pooled cost. This pooled allocation affected the following major programs of SSA: 93.778, 96.658, 93.558, and 93.566. Cause: A journal entry was posted to the SSA Department’s general ledger by another County Department without SSA’s review/approval for allowable activities. The other County department inaccurately posted unallowable costs to the SSA department’s general ledger and SSA did not follow their procedures to ensure allowable costs were properly reported as a cost that can be specifically assigned to activities of the major programs identified in the County’s expense claims. Effect: Unallowable costs were included in the direct cost pool to be further allocated to the federal funded major programs. Questioned Costs: Questioned costs identified amounted to $50,971. The allocation of questioned costs to the major programs tested were as follows: Medicaid Cluster (93.558) - $16,329 Foster Care Title IV-E (93.658) - $17,009 Temporary Assistance for Needy Families (93.778) - $17,633 The allocation to the Refugee and Entrant Assistance State/Replacement Designee Programs (93.566) was of a trivial amount. Context/Sampling: A sample of forty (40) amounting to $10,365,065 out of all costs included in the indirect cost pool of the County expense claims were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA enhance its procedures to ensure that allocated pooled costs have direct benefit to the department’s various federally funded programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-015 Program: Medicaid Cluster, Foster Care Title IV-E, Temporary Assistance for Needy Families, Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.778, 93.658, 93.558, 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.413(c)(1), Direct Costs, state that direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as direct or indirect costs. 2 CFR Section 200.416(b), Cost Allocation Plans and Indirect Cost Proposals, states that individual departments typically charge Federal awards for indirect costs through an indirect cost rate. A separate indirect cost rate proposal for each operating department is usually necessary to claim indirect costs under Federal awards. Indirect costs include (1) the indirect costs originating in each operating department of the State, local government, or Indian Tribe carrying out Federal awards; and (2) the costs of central governmental services distributed through the central service cost allocation plan and not otherwise treated as direct costs. Condition: During our testing of pooled costs claimed through County Expense Claims, we noted that one (1) of forty (40) transactions was not a department cost that should have been included in the pooled cost. This pooled allocation affected the following major programs of SSA: 93.778, 96.658, 93.558, and 93.566. Cause: A journal entry was posted to the SSA Department’s general ledger by another County Department without SSA’s review/approval for allowable activities. The other County department inaccurately posted unallowable costs to the SSA department’s general ledger and SSA did not follow their procedures to ensure allowable costs were properly reported as a cost that can be specifically assigned to activities of the major programs identified in the County’s expense claims. Effect: Unallowable costs were included in the direct cost pool to be further allocated to the federal funded major programs. Questioned Costs: Questioned costs identified amounted to $50,971. The allocation of questioned costs to the major programs tested were as follows: Medicaid Cluster (93.558) - $16,329 Foster Care Title IV-E (93.658) - $17,009 Temporary Assistance for Needy Families (93.778) - $17,633 The allocation to the Refugee and Entrant Assistance State/Replacement Designee Programs (93.566) was of a trivial amount. Context/Sampling: A sample of forty (40) amounting to $10,365,065 out of all costs included in the indirect cost pool of the County expense claims were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA enhance its procedures to ensure that allocated pooled costs have direct benefit to the department’s various federally funded programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-015 Program: Medicaid Cluster, Foster Care Title IV-E, Temporary Assistance for Needy Families, Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.778, 93.658, 93.558, 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.413(c)(1), Direct Costs, state that direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as direct or indirect costs. 2 CFR Section 200.416(b), Cost Allocation Plans and Indirect Cost Proposals, states that individual departments typically charge Federal awards for indirect costs through an indirect cost rate. A separate indirect cost rate proposal for each operating department is usually necessary to claim indirect costs under Federal awards. Indirect costs include (1) the indirect costs originating in each operating department of the State, local government, or Indian Tribe carrying out Federal awards; and (2) the costs of central governmental services distributed through the central service cost allocation plan and not otherwise treated as direct costs. Condition: During our testing of pooled costs claimed through County Expense Claims, we noted that one (1) of forty (40) transactions was not a department cost that should have been included in the pooled cost. This pooled allocation affected the following major programs of SSA: 93.778, 96.658, 93.558, and 93.566. Cause: A journal entry was posted to the SSA Department’s general ledger by another County Department without SSA’s review/approval for allowable activities. The other County department inaccurately posted unallowable costs to the SSA department’s general ledger and SSA did not follow their procedures to ensure allowable costs were properly reported as a cost that can be specifically assigned to activities of the major programs identified in the County’s expense claims. Effect: Unallowable costs were included in the direct cost pool to be further allocated to the federal funded major programs. Questioned Costs: Questioned costs identified amounted to $50,971. The allocation of questioned costs to the major programs tested were as follows: Medicaid Cluster (93.558) - $16,329 Foster Care Title IV-E (93.658) - $17,009 Temporary Assistance for Needy Families (93.778) - $17,633 The allocation to the Refugee and Entrant Assistance State/Replacement Designee Programs (93.566) was of a trivial amount. Context/Sampling: A sample of forty (40) amounting to $10,365,065 out of all costs included in the indirect cost pool of the County expense claims were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA enhance its procedures to ensure that allocated pooled costs have direct benefit to the department’s various federally funded programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-015 Program: Medicaid Cluster, Foster Care Title IV-E, Temporary Assistance for Needy Families, Refugee and Entrant Assistance State/Replacement Designee Administered Programs Federal Financial Assistance Listing Number: 93.778, 93.658, 93.558, 93.566 Federal Grantor: U.S. Department of Health and Human Services Award No. and Year: Various Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.413(c)(1), Direct Costs, state that direct costs are those costs that can be identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Costs incurred for the same purpose in like circumstances must be treated consistently as direct or indirect costs. 2 CFR Section 200.416(b), Cost Allocation Plans and Indirect Cost Proposals, states that individual departments typically charge Federal awards for indirect costs through an indirect cost rate. A separate indirect cost rate proposal for each operating department is usually necessary to claim indirect costs under Federal awards. Indirect costs include (1) the indirect costs originating in each operating department of the State, local government, or Indian Tribe carrying out Federal awards; and (2) the costs of central governmental services distributed through the central service cost allocation plan and not otherwise treated as direct costs. Condition: During our testing of pooled costs claimed through County Expense Claims, we noted that one (1) of forty (40) transactions was not a department cost that should have been included in the pooled cost. This pooled allocation affected the following major programs of SSA: 93.778, 96.658, 93.558, and 93.566. Cause: A journal entry was posted to the SSA Department’s general ledger by another County Department without SSA’s review/approval for allowable activities. The other County department inaccurately posted unallowable costs to the SSA department’s general ledger and SSA did not follow their procedures to ensure allowable costs were properly reported as a cost that can be specifically assigned to activities of the major programs identified in the County’s expense claims. Effect: Unallowable costs were included in the direct cost pool to be further allocated to the federal funded major programs. Questioned Costs: Questioned costs identified amounted to $50,971. The allocation of questioned costs to the major programs tested were as follows: Medicaid Cluster (93.558) - $16,329 Foster Care Title IV-E (93.658) - $17,009 Temporary Assistance for Needy Families (93.778) - $17,633 The allocation to the Refugee and Entrant Assistance State/Replacement Designee Programs (93.566) was of a trivial amount. Context/Sampling: A sample of forty (40) amounting to $10,365,065 out of all costs included in the indirect cost pool of the County expense claims were selected for testing. Repeat Finding from Prior Years: No. Recommendation: We recommend the SSA enhance its procedures to ensure that allocated pooled costs have direct benefit to the department’s various federally funded programs. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-010 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Financial Assistance Listing Number: 97.036 Federal Grantor: U.S. Department of Homeland Security Pass Through: California Office of Emergency Services Award No. and Year: 059-00000 and 2019 Compliance Requirements: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: For two (2) out of three (3) project application summary reports tested, the OCPW did not retain evidence to document the individual who reviewed and approved the required reports. Cause: The department’s procedures did not include documenting the review and approval of the reports prior to submission. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate or incomplete being submitted or disclosed to the granting agency. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A non-statistical sample of three (3) of nine (9) Grant Project Application Summary Reports were selecting for testing. The condition above was identified during our procedures over reporting testing. Repeat Finding: No. Recommendation: We recommend the OCPW department revise its procedures to include evidence to document the individual who reviewed and approved required reports prior to submission. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-011 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Financial Assistance Listing Number: 97.036 Federal Grantor: U.S. Department of Homeland Security Pass Through: California Office of Emergency Services Award No. and Year: 059-00000 Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: In accordance with the 2024 OMB Compliance Supplement, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when (1) FEMA has approved the nonfederal entity’s Project, and (2) the nonfederal entity has incurred the eligible expenditures. FEMA’s approval of a subaward is indicated when FEMA obligates the federal share of the eligible project cost to the recipient. Federal awards expended in years subsequent to the fiscal year in which the Project is approved are to be recorded on the nonfederal entity’s SEFA in those subsequent years. In addition, section 200.303 of the Uniform Guidance states that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the Schedule of Expenditures of Federal Awards and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) we noted the County reported expenditures totaling $5,820,436 that should have been reported on the FY 2023 SEFA, as the granting agency approved the expenditures in FY 2023 and the County incurred the expenditures prior to June 30, 2023. Cause: The County lacks adequate internal controls to ensure the SEFA is completely and accurately stated. Effect: The initial FY 2024 SEFA provided was overstated by $5,820,436. However, we noted these expenditures would not have had a material effect on the FY 2023 SEFA. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used. Program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County establish policies and implement internal controls to ensure that expenditures are reported on the SEFA in accordance with program requirements. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-005 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: For three (3) of eight (8) vendors tested, we were not able to verify that the Sheriff Department followed their internal control to ensure the vendor was not suspended or debarred prior to entering the transaction. Cause: The Sheriff department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County’s policy was not consistently followed, which required verification of suspension or debarment prior to entering the contract. The department subsequently verified that the vendor was not suspended or debarred. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of thirty-three (33) procurement contracts were tested. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff’s Department adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-006 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the Sheriff Department’s compliance with allowable costs/cost principles requirements, we noted that thirty-three (33) of forty (40) overtime cost calculations were miscalculated. Cause: Equitable sharing funds may not be used for salaries, except under certain provisions outlined in Section V.B.3 of the Equitable Sharing Guide including overtime. The Sheriff’s Department calculates the allowable portion of personnel salaries using a separate template that contained a formula error which inaccurately calculated the total salaries costs allocated to the program. The Sheriff’s department did not have internal controls in place to ensure that the allowed salaries were being calculated correctly. However, the error was detected after the 5th out of 6 months in which these types of costs were allocated to the program. Effect: Salary costs were allocated to the program in an incorrect amount. Questioned Costs: Our testing resulted in questioned costs in the amount of $3,550. However, the total questioned costs for the total population was $23,409. Context/Sampling: A sample of forty (40) individuals were selected from a population consisting of (840) payroll transactions. Repeat Finding from Prior Years: No. Recommendation: We recommend the Sheriff’s Department establish and maintain internal controls to ensure the overtime calculations are being accurately allocated to the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-005 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: For three (3) of eight (8) vendors tested, we were not able to verify that the Sheriff Department followed their internal control to ensure the vendor was not suspended or debarred prior to entering the transaction. Cause: The Sheriff department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County’s policy was not consistently followed, which required verification of suspension or debarment prior to entering the contract. The department subsequently verified that the vendor was not suspended or debarred. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of thirty-three (33) procurement contracts were tested. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff’s Department adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-006 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the Sheriff Department’s compliance with allowable costs/cost principles requirements, we noted that thirty-three (33) of forty (40) overtime cost calculations were miscalculated. Cause: Equitable sharing funds may not be used for salaries, except under certain provisions outlined in Section V.B.3 of the Equitable Sharing Guide including overtime. The Sheriff’s Department calculates the allowable portion of personnel salaries using a separate template that contained a formula error which inaccurately calculated the total salaries costs allocated to the program. The Sheriff’s department did not have internal controls in place to ensure that the allowed salaries were being calculated correctly. However, the error was detected after the 5th out of 6 months in which these types of costs were allocated to the program. Effect: Salary costs were allocated to the program in an incorrect amount. Questioned Costs: Our testing resulted in questioned costs in the amount of $3,550. However, the total questioned costs for the total population was $23,409. Context/Sampling: A sample of forty (40) individuals were selected from a population consisting of (840) payroll transactions. Repeat Finding from Prior Years: No. Recommendation: We recommend the Sheriff’s Department establish and maintain internal controls to ensure the overtime calculations are being accurately allocated to the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-005 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Procurement and Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. Condition: For three (3) of eight (8) vendors tested, we were not able to verify that the Sheriff Department followed their internal control to ensure the vendor was not suspended or debarred prior to entering the transaction. Cause: The Sheriff department did not follow their policy to verify the information described in the condition prior to entering the transactions. Effect: The County’s policy was not consistently followed, which required verification of suspension or debarment prior to entering the contract. The department subsequently verified that the vendor was not suspended or debarred. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of eight (8) out of thirty-three (33) procurement contracts were tested. The condition noted above was identified during our procedures related to procurement and suspension and debarment. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Sheriff’s Department adhere to their procurement procedures requiring the suspension or debarment verification is performed prior to entering into a covered transaction. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2024-006 Program: Equitable Sharing Program Federal Financial Assistance Listing Number: 16.922 Federal Grantor: U.S. Department of Justice Award No. and Year: 2024 Compliance Requirements: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance and Instance of Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the Sheriff Department’s compliance with allowable costs/cost principles requirements, we noted that thirty-three (33) of forty (40) overtime cost calculations were miscalculated. Cause: Equitable sharing funds may not be used for salaries, except under certain provisions outlined in Section V.B.3 of the Equitable Sharing Guide including overtime. The Sheriff’s Department calculates the allowable portion of personnel salaries using a separate template that contained a formula error which inaccurately calculated the total salaries costs allocated to the program. The Sheriff’s department did not have internal controls in place to ensure that the allowed salaries were being calculated correctly. However, the error was detected after the 5th out of 6 months in which these types of costs were allocated to the program. Effect: Salary costs were allocated to the program in an incorrect amount. Questioned Costs: Our testing resulted in questioned costs in the amount of $3,550. However, the total questioned costs for the total population was $23,409. Context/Sampling: A sample of forty (40) individuals were selected from a population consisting of (840) payroll transactions. Repeat Finding from Prior Years: No. Recommendation: We recommend the Sheriff’s Department establish and maintain internal controls to ensure the overtime calculations are being accurately allocated to the program. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Criteria: The federal award program noted above is not subject to the Treasury-State Cash Management Improvement Act agreement and, as such, is subject to 2 CFR 200.305(b), which states: “The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The State of Hawaii, Department of Budget and Finance has determined and communicated in Finance Memorandum 20-02 that their standard for an “administratively feasible time period” was 21 calendar days. Condition: During the testing of the Department’s cash management procedures, it was determined that eight out of sixty payments tested were not distributed within 21 days of the draw down of funds. For the items tested, the time elapsed between draw down and payment ranged from 22 to 44 days. Context: During the fiscal year ended June 30, 2024, the program expended $9,608,301 (excluding food expenditures). Cause: The Department draws down federal funds that will be needed based on the expenditures that must be paid. However, since deposits must be posted prior to the processing of payments or disbursing of the funds, it is difficult for the Department to disburse federal funds in accordance with 2 CFR 200.305 (b). Also, the State’s payment process requires all State departments to process payments through DAGS resulting in processing delays. Effect: Noncompliance with federal regulations could result in a loss of funding that may jeopardize the operations of the Department’s federally funded programs. Questioned Costs: None Identification as a Repeat Finding, if applicable: See finding 2023-011 included in the Summary Schedule of Prior Audit Findings. Recommendation: We recommend that the Department work with DAGS and the Department of Budget and Finance to ensure compliance with established standard and timely disbursement of federal funds in accordance with 2 CFR 200.305(b). Views of Responsible Officials: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan issued by the Department.
Cluster name: CDBG – Entitlement/Special Purpose Grants Cluster Assistance Listings number and name: 14.218 Community Development Block Grants/Entitlement Grants Award numbers and years: B-20-UW-04-0501, July 1, 2023 through September 1, 2027; B-23-UC-04-0501, July 1, 2023 through September 1, 2030 Federal agency: U.S. Department of Housing and Urban Development Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal laws and regulations and County policies, the Maricopa County Human Services Department (Department) failed to report certain information on the federal government’s reporting system for $953,103 in subawards it made to 4 subrecipients during fiscal year 2024 for the program. Specifically, for 4 of 9 subawards tested, the Department did not report any required information about the subawards, including subaward organizations’ names and subaward amounts and terms. During fiscal year 2024, the Department spent $953,103 of federal monies related to these subawards, or 30.5 percent of the Department’s total $3.13 million expended, for this program. Effect—The County’s stakeholders and the public did not have access to transparent and timely information about the Department’s federal award spending decisions on USAspending.gov as required by federal laws and regulations. Additionally, the Department is at risk that this finding applies to other federal programs it administers. Cause—The Department’s contract specialist did not include these 4 subawards on the tracking list used to monitor grants and report information to the federal government’s reporting system as required, because 3 of the subawards were contracted by the Office of Procurement Services rather than directly through the Department and 1 subaward amendment was not included due to error. Criteria—The Federal Funding Accountability and Transparency Act (FFATA) and federal Uniform Guidance regulations require the Department, as a direct recipient of federal awards, to report certain information about each subaward action equaling or exceeding $30,000 in federal monies on the FFATA Subaward Reporting System no later than month-end of the month following the subaward action so that the information can be displayed to the public on the website, USAspending.gov.1 Specifically, the federal Uniform Guidance requires the Department to report the subrecipient organization’s name, award amount, award term, and other information about the subaward, if applicable, for each subaward action equaling or exceeding the $30,000 threshold (2 Code of Federal Regulations [CFR], §170.320 and Appendix A to part 170). Additionally, the County’s grant policies and procedures require the Department to perform this reporting for federal awards (Maricopa County Grants Manual [2023], Section K, page 31). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Immediately report on the FFATA Subaward Reporting System the required information for its subawards for this program, including the 4 that were not previously reported. 2. Follow the County’s grant policies and procedures for reporting subaward actions equaling or exceeding $30,000 no later than month-end of the month following the subaward action, as required by the FFATA and federal Uniform Guidance, which may require providing training to Department staff responsible for reporting the Department’s subaward actions to the federal government’s reporting system. 3. Review and update the tracking list used to monitor grants and report information to the federal government’s reporting system, ensuring all grants contracted through other departments and amendments are included. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The FFATA of 2006 (Public Law 109-282), as amended by section 6202 of Public Law 110-252, was enacted to provide the public with transparency on federal award spending to hold the recipient government accountable for each spending decision and to help reduce wasteful spending of federal monies. As such, federal Uniform Guidance requires reporting on the FFATA Subaward Reporting System at https://www.fsrs.gov.
Cluster name: CDBG – Entitlement/Special Purpose Grants Cluster Assistance Listings number and name: 14.218 Community Development Block Grants/Entitlement Grants Award numbers and years: B-20-UW-04-0501, July 1, 2023 through September 1, 2027; B-23-UC-04-0501, July 1, 2023 through September 1, 2030 Federal agency: U.S. Department of Housing and Urban Development Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal laws and regulations and County policies, the Maricopa County Human Services Department (Department) failed to report certain information on the federal government’s reporting system for $953,103 in subawards it made to 4 subrecipients during fiscal year 2024 for the program. Specifically, for 4 of 9 subawards tested, the Department did not report any required information about the subawards, including subaward organizations’ names and subaward amounts and terms. During fiscal year 2024, the Department spent $953,103 of federal monies related to these subawards, or 30.5 percent of the Department’s total $3.13 million expended, for this program. Effect—The County’s stakeholders and the public did not have access to transparent and timely information about the Department’s federal award spending decisions on USAspending.gov as required by federal laws and regulations. Additionally, the Department is at risk that this finding applies to other federal programs it administers. Cause—The Department’s contract specialist did not include these 4 subawards on the tracking list used to monitor grants and report information to the federal government’s reporting system as required, because 3 of the subawards were contracted by the Office of Procurement Services rather than directly through the Department and 1 subaward amendment was not included due to error. Criteria—The Federal Funding Accountability and Transparency Act (FFATA) and federal Uniform Guidance regulations require the Department, as a direct recipient of federal awards, to report certain information about each subaward action equaling or exceeding $30,000 in federal monies on the FFATA Subaward Reporting System no later than month-end of the month following the subaward action so that the information can be displayed to the public on the website, USAspending.gov.1 Specifically, the federal Uniform Guidance requires the Department to report the subrecipient organization’s name, award amount, award term, and other information about the subaward, if applicable, for each subaward action equaling or exceeding the $30,000 threshold (2 Code of Federal Regulations [CFR], §170.320 and Appendix A to part 170). Additionally, the County’s grant policies and procedures require the Department to perform this reporting for federal awards (Maricopa County Grants Manual [2023], Section K, page 31). Further, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The Department should: 1. Immediately report on the FFATA Subaward Reporting System the required information for its subawards for this program, including the 4 that were not previously reported. 2. Follow the County’s grant policies and procedures for reporting subaward actions equaling or exceeding $30,000 no later than month-end of the month following the subaward action, as required by the FFATA and federal Uniform Guidance, which may require providing training to Department staff responsible for reporting the Department’s subaward actions to the federal government’s reporting system. 3. Review and update the tracking list used to monitor grants and report information to the federal government’s reporting system, ensuring all grants contracted through other departments and amendments are included. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The FFATA of 2006 (Public Law 109-282), as amended by section 6202 of Public Law 110-252, was enacted to provide the public with transparency on federal award spending to hold the recipient government accountable for each spending decision and to help reduce wasteful spending of federal monies. As such, federal Uniform Guidance requires reporting on the FFATA Subaward Reporting System at https://www.fsrs.gov.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Finding 2024-001 Reporting – Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 14.218 Federal Program Name: CDBG‐Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number and Award Year: B-20-MW-06-0053 – FY20-21 B-21-MC-06-0053 – FY21-22 B-22-MC-06-0053 – FY22-23 B-23-MC-06-0053 – FY23-24 Criteria: Code of Federal Regulations, Title 2 – Federal Financial Assistance, Subtitle A – Office of Management and Budget Guidance for Federal Financial Assistance, Chapter II – Office of Management and Budget Guidance, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements: Performance and Financial Monitoring and Reporting Section § 200.328 Financial reporting. (a) The Federal agency must require only OMB-approved government-wide data elements on recipient financial reports. At the time of publication, this consists of the Federal Financial Report (SF-425); however, this also applies to any future OMB-approved government-wide data elements available from the OMB-designated standards lead. (b) The Federal agency or pass-through entity must collect financial reports no less than annually. The Federal agency or pass-through entity may not collect financial reports more frequently than quarterly unless a specific condition has been implemented in accordance with § 200.208. To the extent practicable, the Federal agency or pass-through entity should collect financial reports in coordination with performance reports. (c) The recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Section § 200.303 Internal Controls The recipient and subrecipient must: (a) 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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: For the Community Development Block Grants/Entitlement Grants Cluster, the City did not submit the reports within the required deadline: Report Type Award Number Period Date Due Date Submitted SF-425 Financial Program-wide reporting 7/1/2023 - 9/30/2023 10/30/2023 1/16/2024 SF-425 Financial Program-wide reporting 1/1/2024 - 3/31/2024 3/30/2024 7/24/2024 Four (4) quarterly financial reports were tested, and two (2) reports were not submitted by the required deadline. Cause: During the audit period, the City did not possess the operational processes/procedures necessary to guarantee timely submission of the SF-425 report. Effect: Failure to submit the SF-425 reports timely results in noncompliance with the reporting requirements in the grant agreement. Questioned Costs: None noted. Identification as a Repeat Finding, If Applicable: No. Recommendation: We recommend that the City strengthen their report submission process and procedures to ensure all required reports are properly reviewed and approved and submitted timely. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval. Management’s View and Corrective Action Plan: The City agrees with this finding. The City has already taken steps to improve its processes/procedures to insure timely submission of all required SF-425 reports.
Assistance Listings number and name: 84.002 Adult Education—Basic Grants to States Award numbers and years: 24FABASC-412421-01A, July 1, 2023 through June 30, 2024; 24FIELCC-412421-01A, July 1, 2023 through June 30, 2024; 24FIETCO-412421-01A, July 1, 2023 through June 30, 2024; 24FPRLEC-412421-01A, July 1, 2023 through June 30, 2024; 24FIECTC-412421-01A, July 1, 2023 through June 30, 2024 Compliance requirements: Activities Allowed or Unallowed and Allowable Costs / Cost Principles Questioned costs: $52,754 Assistance Listings number and name: 84.031 Higher Education—Institutional Aid Award numbers and years: P031S160090, October 1, 2016 through September 30, 2023; P031S190167, October 1, 2019 through September 30, 2024; P031S200096, October 1, 2020 through September 30, 2025; P031S200281, October 1, 2020 through September 30, 2025; P031C210057, October 1, 2021 through September 30, 2026; P031C210077, October 1, 2021 through September 30, 2026; P031S220015, October 1, 2022 through September 30, 2027; P031S220179, October 1, 2022 through September 30, 2027; P031A230147, October 1, 2023 through September 30, 2028; P031S230158, October 1, 2023 through September 30, 2028 Compliance requirements: Activities allowed or unallowed Questioned costs: $20,411 Federal agency: U.S. Department of Education Total questioned costs: $73,165 Condition—Contrary to federal regulations, State law, and District policies, the District did not always retain documentation supporting the Adult Education—Basic Grants to States and Higher Education—Institutional Aid programs’ payroll costs or approve employee time sheets after the work was performed for these programs. Specifically, the District could not provide documentation to support employees’ pay rates and authorization to perform work for these programs, such as offer letters, contracts, and personnel action forms, or did not approve employee time sheets after the work was performed for 22 of 54 payroll transactions we tested totaling $73,165. See finding 2024-01 in our Report on Internal Controls and Compliance for a similar finding related to the District not reviewing or approving employee timesheets.1 Also, see Table 1 on the next page for further information. Table 1 Summary of the $73,165 of payroll costs the District did not properly support or approve Fiscal year 2024 84.002 Adult Education—Basic Grants to States 84.031 Higher Education—Institutional Aid Total for both programs Total employees tested 35 19 54 Total employees with unsupported pay rates and lack of authorization to perform work for the programs 7 1 8 Total unsupported payroll costs $52,366 $9,636 $62,002 Total employee time sheets lacking approval after the work was performed2 2 12 14 Total unapproved payroll costs $388 $10,775 $11,163 Total number of employees with unsupported or unapproved payroll costs 9 13 22 Total salaries not supported $52,754 $20,411 $73,165 Effect—The District’s failure to retain documentation supporting payroll costs and approve time sheets increased the risk that the $52,754 for the Adult Education—Basic Grants to States and $20,411 for the Higher Education—Institutional Aid programs may not have been spent in accordance with their award terms and conditions. Consequently, the District may be required to return these monies to the federal agency in accordance with federal requirements.3 Further, see Table 2 for information on the overall payroll costs per program during fiscal year 2024 that are at an increased risk of not being spent in accordance with the award terms and conditions. Finally, the District is at risk that this finding applies to other federal programs it administers. Table 2 Calculation of percent of payroll costs to total program expenditures Fiscal year 2024 84.002 Adult Education—Basic Grants to States 84.031 Higher Education—Institutional Aid Total number of employees 279 214 Total payroll costs $3,613,133 $1,984,462 Total program costs $5,026,228 $6,696,263 % of payroll costs to total program costs 72% 30% Cause—The District’s management reported that it did not retain documentation to support employees’ pay rates and authorization to perform work for the federal programs for employees hired prior to 2018 as they were archived and support was no longer available, and some offers for temporary employees were made verbally over the phone and never documented. The District’s policies and procedures lack requirements to document all employment offers, including temporary employment offers. Additionally, as discussed in finding 2024-01 in our Report on Internal Controls and Compliance, some supervisors did not follow District policies and procedures requiring employees’ time sheets to be reviewed and approved either before processing payroll or within 3 business days after receiving a payroll email notification that the employee’s time sheet needed approval.1 Finally, District management did not sufficiently monitor whether each college’s Human Resources Department was enforcing these policies and procedures or verifying that supervisors reviewed and approved employees’ time sheets, as required. Criteria—Federal regulation requires the District to maintain records for salaries and wages charged to federal awards that accurately reflect the work performed to ensure they are accurate, allowable, and properly allocated (2 CFR §200.430[g][1][i]). Also, federal regulation, similar to State law and the District’s record retention policies, requires the District to retain all public records, including those contained in personnel files, related to a federal program for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor (2 CFR §200.334).4,5 Further, the District’s written procedures require each employee’s time sheet to be reviewed and approved by the employee’s supervisor either before processing payroll or within 3 business days from receiving a payroll email notification that the employee’s time sheet needs approval. Additionally, each college’s Human Resources Department is responsible for verifying that supervisors review and approve time sheets timely.6 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The District should: 1. Retain documentation for all payroll costs, such as employment agreements or acceptance letters, to demonstrate employees’ salaries and wages are authorized to be charged to federal programs and spent in accordance with the programs’ award terms and conditions. 2. Review the fiscal year 2024 payroll costs for the Adult Education—Basic Grants to States and Higher Education—Institutional Aid programs to ensure they were properly supported and spent in accordance with the award terms and conditions and coordinate with the U.S. Department of Education, as necessary, to adjust future federal reimbursement requests or repay any unallowable costs the District charged to the programs. 3. Enforce and train employees on District written procedures and requirements to: a. Retain all public records, including those contained in personnel files, related to a federal program for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor. b. Ensure supervisors review and approve employees’ time sheets, either before payroll is processed or within 3 business days from receiving the payroll email notification that a time sheet needs approval, to verify employees accurately reported their time worked. This review should be performed after the employee performed the work to ensure the payroll costs charged to the programs accurately reflect the work performed and are accurate, allowable, and properly allocated. 4. Update District written procedures to require documentation of all employment offers, including offers for temporary employees. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Arizona Auditor General. (2024). Report on Internal Control and Compliance, June 30, 2024. Phoenix, AZ. https://www.azauditor.gov/sites/default/files/2025-02/MaricopaCountyCommunityCollegeDistrictJune30_2024ReportOnInternalControlAndCompliance.pdf 2 The 14 employee time sheets lacking approval after the work was performed includes 5 time sheets totaling $6,917 for the Higher Education—Institutional Aid program that were never approved by a supervisor and 2 time sheets totaling $388 for the Adult Education—Basic Grants to States program and 7 time sheets totaling $3,858 for the Higher Education—Institutional Aid program that were approved by a supervisor between 1 and 7 days prior to the work being performed by the employee. 3 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the District, takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 4 Maricopa County Community College District (MCCCD). (2023). Staff Policy Manual. 5 Arizona State Library, Archives and Public Records. (2023) General Retention Schedule Created for All Public Bodies. Retrieved 3/12/25 from https://apps.azlibrary.gov/files/docs/all_general_schedules_searchable.pdf 6 Maricopa County Community College District (MCCCD). Version 1.1 (2019). Monitoring Time Approvals: Monitoring Procedures.
Assistance Listings number and name: 84.002 Adult Education—Basic Grants to States Award numbers and years: 24FABASC-412421-01A, July 1, 2023 through June 30, 2024; 24FIELCC-412421-01A, July 1, 2023 through June 30, 2024; 24FIETCO-412421-01A, July 1, 2023 through June 30, 2024; 24FPRLEC-412421-01A, July 1, 2023 through June 30, 2024; 24FIECTC-412421-01A, July 1, 2023 through June 30, 2024 Compliance requirements: Activities Allowed or Unallowed and Allowable Costs / Cost Principles Questioned costs: $52,754 Assistance Listings number and name: 84.031 Higher Education—Institutional Aid Award numbers and years: P031S160090, October 1, 2016 through September 30, 2023; P031S190167, October 1, 2019 through September 30, 2024; P031S200096, October 1, 2020 through September 30, 2025; P031S200281, October 1, 2020 through September 30, 2025; P031C210057, October 1, 2021 through September 30, 2026; P031C210077, October 1, 2021 through September 30, 2026; P031S220015, October 1, 2022 through September 30, 2027; P031S220179, October 1, 2022 through September 30, 2027; P031A230147, October 1, 2023 through September 30, 2028; P031S230158, October 1, 2023 through September 30, 2028 Compliance requirements: Activities allowed or unallowed Questioned costs: $20,411 Federal agency: U.S. Department of Education Total questioned costs: $73,165 Condition—Contrary to federal regulations, State law, and District policies, the District did not always retain documentation supporting the Adult Education—Basic Grants to States and Higher Education—Institutional Aid programs’ payroll costs or approve employee time sheets after the work was performed for these programs. Specifically, the District could not provide documentation to support employees’ pay rates and authorization to perform work for these programs, such as offer letters, contracts, and personnel action forms, or did not approve employee time sheets after the work was performed for 22 of 54 payroll transactions we tested totaling $73,165. See finding 2024-01 in our Report on Internal Controls and Compliance for a similar finding related to the District not reviewing or approving employee timesheets.1 Also, see Table 1 on the next page for further information. Table 1 Summary of the $73,165 of payroll costs the District did not properly support or approve Fiscal year 2024 84.002 Adult Education—Basic Grants to States 84.031 Higher Education—Institutional Aid Total for both programs Total employees tested 35 19 54 Total employees with unsupported pay rates and lack of authorization to perform work for the programs 7 1 8 Total unsupported payroll costs $52,366 $9,636 $62,002 Total employee time sheets lacking approval after the work was performed2 2 12 14 Total unapproved payroll costs $388 $10,775 $11,163 Total number of employees with unsupported or unapproved payroll costs 9 13 22 Total salaries not supported $52,754 $20,411 $73,165 Effect—The District’s failure to retain documentation supporting payroll costs and approve time sheets increased the risk that the $52,754 for the Adult Education—Basic Grants to States and $20,411 for the Higher Education—Institutional Aid programs may not have been spent in accordance with their award terms and conditions. Consequently, the District may be required to return these monies to the federal agency in accordance with federal requirements.3 Further, see Table 2 for information on the overall payroll costs per program during fiscal year 2024 that are at an increased risk of not being spent in accordance with the award terms and conditions. Finally, the District is at risk that this finding applies to other federal programs it administers. Table 2 Calculation of percent of payroll costs to total program expenditures Fiscal year 2024 84.002 Adult Education—Basic Grants to States 84.031 Higher Education—Institutional Aid Total number of employees 279 214 Total payroll costs $3,613,133 $1,984,462 Total program costs $5,026,228 $6,696,263 % of payroll costs to total program costs 72% 30% Cause—The District’s management reported that it did not retain documentation to support employees’ pay rates and authorization to perform work for the federal programs for employees hired prior to 2018 as they were archived and support was no longer available, and some offers for temporary employees were made verbally over the phone and never documented. The District’s policies and procedures lack requirements to document all employment offers, including temporary employment offers. Additionally, as discussed in finding 2024-01 in our Report on Internal Controls and Compliance, some supervisors did not follow District policies and procedures requiring employees’ time sheets to be reviewed and approved either before processing payroll or within 3 business days after receiving a payroll email notification that the employee’s time sheet needed approval.1 Finally, District management did not sufficiently monitor whether each college’s Human Resources Department was enforcing these policies and procedures or verifying that supervisors reviewed and approved employees’ time sheets, as required. Criteria—Federal regulation requires the District to maintain records for salaries and wages charged to federal awards that accurately reflect the work performed to ensure they are accurate, allowable, and properly allocated (2 CFR §200.430[g][1][i]). Also, federal regulation, similar to State law and the District’s record retention policies, requires the District to retain all public records, including those contained in personnel files, related to a federal program for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor (2 CFR §200.334).4,5 Further, the District’s written procedures require each employee’s time sheet to be reviewed and approved by the employee’s supervisor either before processing payroll or within 3 business days from receiving a payroll email notification that the employee’s time sheet needs approval. Additionally, each college’s Human Resources Department is responsible for verifying that supervisors review and approve time sheets timely.6 Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The District should: 1. Retain documentation for all payroll costs, such as employment agreements or acceptance letters, to demonstrate employees’ salaries and wages are authorized to be charged to federal programs and spent in accordance with the programs’ award terms and conditions. 2. Review the fiscal year 2024 payroll costs for the Adult Education—Basic Grants to States and Higher Education—Institutional Aid programs to ensure they were properly supported and spent in accordance with the award terms and conditions and coordinate with the U.S. Department of Education, as necessary, to adjust future federal reimbursement requests or repay any unallowable costs the District charged to the programs. 3. Enforce and train employees on District written procedures and requirements to: a. Retain all public records, including those contained in personnel files, related to a federal program for a period of 3 years from the date the program’s final report was submitted to the federal awarding agency or pass-through grantor. b. Ensure supervisors review and approve employees’ time sheets, either before payroll is processed or within 3 business days from receiving the payroll email notification that a time sheet needs approval, to verify employees accurately reported their time worked. This review should be performed after the employee performed the work to ensure the payroll costs charged to the programs accurately reflect the work performed and are accurate, allowable, and properly allocated. 4. Update District written procedures to require documentation of all employment offers, including offers for temporary employees. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 Arizona Auditor General. (2024). Report on Internal Control and Compliance, June 30, 2024. Phoenix, AZ. https://www.azauditor.gov/sites/default/files/2025-02/MaricopaCountyCommunityCollegeDistrictJune30_2024ReportOnInternalControlAndCompliance.pdf 2 The 14 employee time sheets lacking approval after the work was performed includes 5 time sheets totaling $6,917 for the Higher Education—Institutional Aid program that were never approved by a supervisor and 2 time sheets totaling $388 for the Adult Education—Basic Grants to States program and 7 time sheets totaling $3,858 for the Higher Education—Institutional Aid program that were approved by a supervisor between 1 and 7 days prior to the work being performed by the employee. 3 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient, the District, takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 4 Maricopa County Community College District (MCCCD). (2023). Staff Policy Manual. 5 Arizona State Library, Archives and Public Records. (2023) General Retention Schedule Created for All Public Bodies. Retrieved 3/12/25 from https://apps.azlibrary.gov/files/docs/all_general_schedules_searchable.pdf 6 Maricopa County Community College District (MCCCD). Version 1.1 (2019). Monitoring Time Approvals: Monitoring Procedures.
Assistance Listings number and name: 93.575 Child Care and Development Block Grant Award numbers and years: DI22-002326, July 1, 2023 through June 30, 2024; P00003796, July 1, 2023 through June 30, 2024; P0001273602, July 1, 2023 through June 30, 2024 Federal agency: U.S. Department of Health and Human Services Pass-through grantor: Arizona Department of Economic Security Compliance requirements: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation, the District’s Student Affairs Department (Department) did not develop, document, or implement internal control procedures to monitor compliance with the program’s reporting requirements. Specifically, for all 4 federal program reports we tested, the Department did not retain documentation that it had reviewed and approved reports prior to submitting them to the pass-through grantor to ensure the reported expenditures were accurate and agreed to the District’s records, and contained only allowable expenses. Despite lacking internal control procedures, we did not identify any inaccurate program information reported to the pass-through grantor. Effect—Without effective internal control procedures in place, there is an increased risk that the Department may not prevent or detect and correct errors on reports it submits to the pass-through grantor, which relies on them to effectively monitor the program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program's success. Finally, the District is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that it had performed independent reviews and approvals of the reports but did not maintain documentation because the District did not have a formal policy requiring a documented review and approval of its reports. Criteria—Federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendation—The Department should develop, document, and implement policies and procedures, and train responsible employees, to monitor compliance with the program’s reporting requirements, including processes to perform and document an independent review and approval of all federal program reports before submitting them to the pass-through grantor to ensure reports are accurate, agree to District records, and contain only allowable expenditures. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
2024-002: Documentation of Internal Controls over Compliance Requirements for Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.568 Federal Program Name: Emergency Food Assistance Program (Administrative Costs) Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K4747 Federal Agency: U.S. Department of the Treasury Assistance Listing Number: 21.027 Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Pass-through Entities: Washington State Department of Agriculture; Hopelink Pass-through Award Numbers: K4778; K2602, K4820 Type of Finding: Significant deficiency in internal control over compliance. Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2024, Food Lifeline did not sufficiently document internal controls over compliance with requirements for activities allowed or unallowed and allowable costs/cost principles. Cause: Food Lifeline did not maintain proper internal controls or have staff members with the appropriate experience to accurately track grant expenditures using the correct project codes. Effect: Although there were no such instances identified during the audit, inadequate internal control over activities allowed or unallowed and allowable costs/cost principles could lead to potential waste or abuse of federal award funds, whether due to fraud or error, and future disallowed costs. Context: Due to turnover among both upper- and lower-level Finance Department personnel during the year ended June 30, 2024, as well as the shuffling of responsibilities among staff, project codes were not properly used to accurately track grant expenditures. Questioned Costs: None Recommendation: We recommend that management implements formal procedures to document internal controls over the allowability of expenditures incurred with federal program funds. Views of Responsible Officials: There is no disagreement with the finding.
2024-002: Documentation of Internal Controls over Compliance Requirements for Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.568 Federal Program Name: Emergency Food Assistance Program (Administrative Costs) Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K4747 Federal Agency: U.S. Department of the Treasury Assistance Listing Number: 21.027 Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Pass-through Entities: Washington State Department of Agriculture; Hopelink Pass-through Award Numbers: K4778; K2602, K4820 Type of Finding: Significant deficiency in internal control over compliance. Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2024, Food Lifeline did not sufficiently document internal controls over compliance with requirements for activities allowed or unallowed and allowable costs/cost principles. Cause: Food Lifeline did not maintain proper internal controls or have staff members with the appropriate experience to accurately track grant expenditures using the correct project codes. Effect: Although there were no such instances identified during the audit, inadequate internal control over activities allowed or unallowed and allowable costs/cost principles could lead to potential waste or abuse of federal award funds, whether due to fraud or error, and future disallowed costs. Context: Due to turnover among both upper- and lower-level Finance Department personnel during the year ended June 30, 2024, as well as the shuffling of responsibilities among staff, project codes were not properly used to accurately track grant expenditures. Questioned Costs: None Recommendation: We recommend that management implements formal procedures to document internal controls over the allowability of expenditures incurred with federal program funds. Views of Responsible Officials: There is no disagreement with the finding.
2024-002: Documentation of Internal Controls over Compliance Requirements for Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.568 Federal Program Name: Emergency Food Assistance Program (Administrative Costs) Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K4747 Federal Agency: U.S. Department of the Treasury Assistance Listing Number: 21.027 Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Pass-through Entities: Washington State Department of Agriculture; Hopelink Pass-through Award Numbers: K4778; K2602, K4820 Type of Finding: Significant deficiency in internal control over compliance. Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2024, Food Lifeline did not sufficiently document internal controls over compliance with requirements for activities allowed or unallowed and allowable costs/cost principles. Cause: Food Lifeline did not maintain proper internal controls or have staff members with the appropriate experience to accurately track grant expenditures using the correct project codes. Effect: Although there were no such instances identified during the audit, inadequate internal control over activities allowed or unallowed and allowable costs/cost principles could lead to potential waste or abuse of federal award funds, whether due to fraud or error, and future disallowed costs. Context: Due to turnover among both upper- and lower-level Finance Department personnel during the year ended June 30, 2024, as well as the shuffling of responsibilities among staff, project codes were not properly used to accurately track grant expenditures. Questioned Costs: None Recommendation: We recommend that management implements formal procedures to document internal controls over the allowability of expenditures incurred with federal program funds. Views of Responsible Officials: There is no disagreement with the finding.
2024-002: Documentation of Internal Controls over Compliance Requirements for Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.568 Federal Program Name: Emergency Food Assistance Program (Administrative Costs) Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K4747 Federal Agency: U.S. Department of the Treasury Assistance Listing Number: 21.027 Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Pass-through Entities: Washington State Department of Agriculture; Hopelink Pass-through Award Numbers: K4778; K2602, K4820 Type of Finding: Significant deficiency in internal control over compliance. Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2024, Food Lifeline did not sufficiently document internal controls over compliance with requirements for activities allowed or unallowed and allowable costs/cost principles. Cause: Food Lifeline did not maintain proper internal controls or have staff members with the appropriate experience to accurately track grant expenditures using the correct project codes. Effect: Although there were no such instances identified during the audit, inadequate internal control over activities allowed or unallowed and allowable costs/cost principles could lead to potential waste or abuse of federal award funds, whether due to fraud or error, and future disallowed costs. Context: Due to turnover among both upper- and lower-level Finance Department personnel during the year ended June 30, 2024, as well as the shuffling of responsibilities among staff, project codes were not properly used to accurately track grant expenditures. Questioned Costs: None Recommendation: We recommend that management implements formal procedures to document internal controls over the allowability of expenditures incurred with federal program funds. Views of Responsible Officials: There is no disagreement with the finding.
2024-002: Documentation of Internal Controls over Compliance Requirements for Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.568 Federal Program Name: Emergency Food Assistance Program (Administrative Costs) Pass-through Entity: Washington State Department of Agriculture Pass-through Award Number: K4747 Federal Agency: U.S. Department of the Treasury Assistance Listing Number: 21.027 Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Pass-through Entities: Washington State Department of Agriculture; Hopelink Pass-through Award Numbers: K4778; K2602, K4820 Type of Finding: Significant deficiency in internal control over compliance. Criteria: Under 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over federal awards. Condition: During the year ended June 30, 2024, Food Lifeline did not sufficiently document internal controls over compliance with requirements for activities allowed or unallowed and allowable costs/cost principles. Cause: Food Lifeline did not maintain proper internal controls or have staff members with the appropriate experience to accurately track grant expenditures using the correct project codes. Effect: Although there were no such instances identified during the audit, inadequate internal control over activities allowed or unallowed and allowable costs/cost principles could lead to potential waste or abuse of federal award funds, whether due to fraud or error, and future disallowed costs. Context: Due to turnover among both upper- and lower-level Finance Department personnel during the year ended June 30, 2024, as well as the shuffling of responsibilities among staff, project codes were not properly used to accurately track grant expenditures. Questioned Costs: None Recommendation: We recommend that management implements formal procedures to document internal controls over the allowability of expenditures incurred with federal program funds. Views of Responsible Officials: There is no disagreement with the finding.
2024-006. TANF ACF-204 Report Does Not Match Supporting Documentation (Finding Type: Significant Deficiency) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.558 Temporary Assistance for Needy Families Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A Data elements for the Temporary Assistance for Needy Families (TANF) program submitted by DWS did not match the supporting documentation. The Annual Report (ACF-204) for the year ended September 30, 2023, had the following errors: These errors were caused by comparing the TANF data to incorrect supporting information in the preparation and not following the report instructions to prepare the report. The report review did not detect these errors. Federal regulations (2 CFR 200.303) require entities to “establish and maintain effective internal controls [procedures]…that provide reasonable assurance that the… entity is managing [federal program] in compliance with… terms and conditions of the federal award.” By not ensuring Reports match supporting information or not following report instructions, DWS is at risk of submitting inaccurate reports and failing to meet federal funding requirements. Recommendation: We recommend that DWS prepare and review all report lines to correct supporting documentation to ensure accuracy prior to submitting the reports. DWS’s Response: DWS agrees with the finding.
2024-009. Unallowable Cash Medical Assistance Benefit Issuances (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: 93.566 Refugee and Entrant Assistance Federal Award Number: Questioned Costs: $3,583 Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A In our review of 40 cash medical assistance (CMA) benefit payments for the Refugee and Entrant Assistance Program, we noted the following errors: These errors occurred due to a lack of effective internal control over the case management and its iterative eligibility determinations, and Eligibility Workers incorrectly evaluating and entering updated case information into the eREP System. 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” If new information is discovered for a case but not properly evaluated, it could lead to further overpayments and underpayments and the misuse of federal funds. Recommendation: We recommend that DWS strengthen their internal control environment and continue to provide training and support to their Eligibility Workers to ensure that case information is properly evaluated and correctly entered into the eREP System. DWS’s Response: DWS agrees with the finding.
2024-015. Reported Number of Homeowners Overstated (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Department of the Treasury Assistance Listing Number and Title: 21.026 COVID-19 Homeowner Assistance Fund Federal Award Number: HAFP-0100 Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The number of unique homeowners classified at or below 100% area median income (AMI) was overreported for all Homeowner Assistance Fund (HAF) quarterly reports submitted to the Treasury. For the two reports that we looked at, the errors were as follows: This error occurred as a result of misinterpreting information received from third parties used to fill out the report and a misunderstanding by both the preparer and reviewer of report requirements and thresholds. To be compliant with federal standards (2CFR 200.303), DWS “must establish and maintain effective internal controls over the award.” Compliance cannot be established without a thorough understanding of the requirements and how the data from third parties is aggregated. Without that understanding and proper reviews to detect and correct errors, DWS may continue to report incorrect data and may risk not meeting the targeted earmark for homeowners assisted with income less than 100% AMI. Recommendation: We recommend that internal control be strengthened so that compliance requirements and data received from others are properly understood before completing and submitting federal reports. DWS’s Response: DWS agrees with the finding.
2024-010. HTF Project Does Not Meet Eligible Income Requirements (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Department of Housing and Urban Development Assistance Listing Number and Title: 14.275 Housing Trust Fund Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A During eligibility reviews, DWS did not detect that a tenant in a Housing Trust Fund (HTF) assisted unit did not meet the income requirements to occupy the HTF-assisted unit. This error occurred because the tenant’s income was entered as $17,115 instead of $18,115 actual reported income, which exceeds the income limitation for this location of $17,400. The review by DWS also did not identify that this apartment complex did not have the specified one, two, and three-bedroom units available for HTF-assisted occupancy as outlined by the deed restrictions for this HTF-constructed apartment complex. Borrowers that are not in compliance with these deed restrictions could face DWS opting to call and make payable in full the HTF loan. 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Without effective internal controls, ineligible tenants may be allowed to occupy HTF-assisted housing, thus limiting the availability of units for eligible extremely low-income families. Recommendation: We recommend that DWS strengthen its internal control to better determine that all HTF assisted housing units contain only income eligible tenants. DWS’s Response: DWS agrees with the finding.
2024-010. HTF Project Does Not Meet Eligible Income Requirements (Finding Type: Significant Deficiency, Reportable Noncompliance) Federal Agency: Department of Housing and Urban Development Assistance Listing Number and Title: 14.275 Housing Trust Fund Federal Award Number: Various Questioned Costs: N/A Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A During eligibility reviews, DWS did not detect that a tenant in a Housing Trust Fund (HTF) assisted unit did not meet the income requirements to occupy the HTF-assisted unit. This error occurred because the tenant’s income was entered as $17,115 instead of $18,115 actual reported income, which exceeds the income limitation for this location of $17,400. The review by DWS also did not identify that this apartment complex did not have the specified one, two, and three-bedroom units available for HTF-assisted occupancy as outlined by the deed restrictions for this HTF-constructed apartment complex. Borrowers that are not in compliance with these deed restrictions could face DWS opting to call and make payable in full the HTF loan. 2 CFR 200.303 requires that “the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Without effective internal controls, ineligible tenants may be allowed to occupy HTF-assisted housing, thus limiting the availability of units for eligible extremely low-income families. Recommendation: We recommend that DWS strengthen its internal control to better determine that all HTF assisted housing units contain only income eligible tenants. DWS’s Response: DWS agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.
2024-008. Non-Payroll Expenditures Did Not Receive Adequate Reviews (Finding Type: Significant Deficiency, Other) Federal Agency: Department of Health and Human Services Assistance Listing Number and Title: Research and Development Cluster (Various ALNs) Federal Award Number: Various Questioned Costs: None Pass-through Entity: N/A Prior Year Single Audit Report Finding Number: N/A The University of Utah (University) did not perform adequate reviews on three of 40 non-payroll expenditures transactions selected for review from the Research and Development (R&D) Cluster projects. According to the University’s policies, non-payroll expenditures are required to have one or both of the following controls procedures to be performed: • Review and approval of individual expenditures by the R&D project’s Principal Investigator (PI), or other appropriate personnel, at the time of purchase. • Timely review and approval of monthly Management Reports by the R&D project’s PI, Account Executive (AE), or a designated alternate. Pursuant to University Policy 3-003, this “Evidence of Review should ordinarily be completed within one month of receipt of the management reports.” In addition, 2 CFR 200.303 requires non-federal entities to establish, document, and maintain effective internal controls to provide reasonable assurance that it manages the federal awards in compliance with federal requirements. Due to a lack of understanding of the importance of reviewing expenditures, as well as travel or technological issues, two expenditures were not reviewed in accordance with the University’s policy. Additionally, a clerical accounting error caused the third expenditure to be recorded in the wrong accounting period and it was not effectively reviewed to prevent the error. Without implementing proper controls, expenditures for unallowable activities or costs are more likely to be charged to federally funded projects without being detected and corrected. Recommendations: We recommend that the R&D project’s PIs perform the following as required by the University’s policy: • Review management reports and complete the evidence of review (EOR) process within the allotted time frame; and • Effectively perform review and approval of individual transactions. University’s Response: The University agrees with the finding.