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.
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.
2024-010. 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.
Develop Written Policies and Procedures Criteria: 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Equipment Management Requirements Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e). In addition, the organizations should ensure that existing written procedures are in compliance with: a. General Procurement Standards 2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services. Condition MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance: Equipment and Real Property Management MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e). Cash Management MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. Procurement, Suspension and Debarment MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Cause MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Recommendation MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation. MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked. MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets. MARTA is in the process of updating the Procurement Policy. MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Develop Written Policies and Procedures Criteria: 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Equipment Management Requirements Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e). In addition, the organizations should ensure that existing written procedures are in compliance with: a. General Procurement Standards 2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services. Condition MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance: Equipment and Real Property Management MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e). Cash Management MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. Procurement, Suspension and Debarment MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Cause MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Recommendation MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation. MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked. MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets. MARTA is in the process of updating the Procurement Policy. MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Develop Written Policies and Procedures Criteria: 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Equipment Management Requirements Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e). In addition, the organizations should ensure that existing written procedures are in compliance with: a. General Procurement Standards 2 CFR 200.318 to 200.327 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services. Condition MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance: Equipment and Real Property Management MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e). Cash Management MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. Procurement, Suspension and Debarment MARTA has a Procurement policy, however, documented procedures are not well-defined regarding the purchase process for different types of procurement, obtaining quotations, bidding, and procedures for verifying that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded. Cause MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Recommendation MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action MARTA has grown substantially in the last several years. This progress includes identifying areas that we need to update or to develop new processes and documentation. MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked. MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing resources available. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets. MARTA is in the process of updating the Procurement Policy. MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. The updated or newly created policies will be brought to the October 2025 Board of Directors meeting for Board review or approval. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2025
Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268, 84.007, 84.033 Federal Award Identification Number: P007A233144, P063P231946, P033A233144, P268K241946 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Per 2 CFR section 200.303(a), a nonfederal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During the audit, it was observed that the University did not have adequate segregation of duties in its financial aid office and did not maintain supporting documentation. The Director of Financial Aid prepares is responsible for authorizing, processing, and reviewing transactions related to Title IV funds. Questioned Costs: N/A Context: Effective internal controls are crucial to ensure funds are properly managed and disbursed. There are instances where the Director of Financial Aid is reviewing and approving financial aid packages, reconciliations and other required reports. We also noted instances were supporting documentation could not be provided. Cause: The University’s financial aid processes have overlapping responsibilities which has resulted in inadequate segregation of duties. Effect: The absence of proper segregation of duties increases risk for errors, noncompliance, and inaccuracies in awarding and reporting of Title IV funds. Repeat Finding: No Recommendation: We recommend the University implement additional internal controls to ensure proper segregation of duties. This includes hiring additional staff or redistributing responsibilities to separate the functions of authorizing, processing, and reviewing transactions. Additionally, ongoing training should be provided to financial aid staff on the importance of internal controls and compliance with Title IV regulations. Views of Responsible Officials: There is no disagreement with the audit finding and the University is in the process of implementing corrective procedures.
Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268, 84.007, 84.033 Federal Award Identification Number: P007A233144, P063P231946, P033A233144, P268K241946 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Per 2 CFR section 200.303(a), a nonfederal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During the audit, it was observed that the University did not have adequate segregation of duties in its financial aid office and did not maintain supporting documentation. The Director of Financial Aid prepares is responsible for authorizing, processing, and reviewing transactions related to Title IV funds. Questioned Costs: N/A Context: Effective internal controls are crucial to ensure funds are properly managed and disbursed. There are instances where the Director of Financial Aid is reviewing and approving financial aid packages, reconciliations and other required reports. We also noted instances were supporting documentation could not be provided. Cause: The University’s financial aid processes have overlapping responsibilities which has resulted in inadequate segregation of duties. Effect: The absence of proper segregation of duties increases risk for errors, noncompliance, and inaccuracies in awarding and reporting of Title IV funds. Repeat Finding: No Recommendation: We recommend the University implement additional internal controls to ensure proper segregation of duties. This includes hiring additional staff or redistributing responsibilities to separate the functions of authorizing, processing, and reviewing transactions. Additionally, ongoing training should be provided to financial aid staff on the importance of internal controls and compliance with Title IV regulations. Views of Responsible Officials: There is no disagreement with the audit finding and the University is in the process of implementing corrective procedures.
Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268, 84.007, 84.033 Federal Award Identification Number: P007A233144, P063P231946, P033A233144, P268K241946 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Per 2 CFR section 200.303(a), a nonfederal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During the audit, it was observed that the University did not have adequate segregation of duties in its financial aid office and did not maintain supporting documentation. The Director of Financial Aid prepares is responsible for authorizing, processing, and reviewing transactions related to Title IV funds. Questioned Costs: N/A Context: Effective internal controls are crucial to ensure funds are properly managed and disbursed. There are instances where the Director of Financial Aid is reviewing and approving financial aid packages, reconciliations and other required reports. We also noted instances were supporting documentation could not be provided. Cause: The University’s financial aid processes have overlapping responsibilities which has resulted in inadequate segregation of duties. Effect: The absence of proper segregation of duties increases risk for errors, noncompliance, and inaccuracies in awarding and reporting of Title IV funds. Repeat Finding: No Recommendation: We recommend the University implement additional internal controls to ensure proper segregation of duties. This includes hiring additional staff or redistributing responsibilities to separate the functions of authorizing, processing, and reviewing transactions. Additionally, ongoing training should be provided to financial aid staff on the importance of internal controls and compliance with Title IV regulations. Views of Responsible Officials: There is no disagreement with the audit finding and the University is in the process of implementing corrective procedures.
Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063, 84.268, 84.007, 84.033 Federal Award Identification Number: P007A233144, P063P231946, P033A233144, P268K241946 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Per 2 CFR section 200.303(a), a nonfederal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During the audit, it was observed that the University did not have adequate segregation of duties in its financial aid office and did not maintain supporting documentation. The Director of Financial Aid prepares is responsible for authorizing, processing, and reviewing transactions related to Title IV funds. Questioned Costs: N/A Context: Effective internal controls are crucial to ensure funds are properly managed and disbursed. There are instances where the Director of Financial Aid is reviewing and approving financial aid packages, reconciliations and other required reports. We also noted instances were supporting documentation could not be provided. Cause: The University’s financial aid processes have overlapping responsibilities which has resulted in inadequate segregation of duties. Effect: The absence of proper segregation of duties increases risk for errors, noncompliance, and inaccuracies in awarding and reporting of Title IV funds. Repeat Finding: No Recommendation: We recommend the University implement additional internal controls to ensure proper segregation of duties. This includes hiring additional staff or redistributing responsibilities to separate the functions of authorizing, processing, and reviewing transactions. Additionally, ongoing training should be provided to financial aid staff on the importance of internal controls and compliance with Title IV regulations. Views of Responsible Officials: There is no disagreement with the audit finding and the University is in the process of implementing corrective procedures.
Program/Cluster: Disaster Grants – Public Assistance Federal Financial Assistance Listing: 97.036 Federal Agency: U.S. Department of Federal Emergency Management Agency Pass-through: California Governor’s Office of Emergency Services Award No. and Year: FEMA-4683-DR-CA (2024) Compliance Requirement: O – Other Information Type of Finding: Material Weakness in Internal Control Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. As outlined in the Disaster Grants – Public Assistance section of the Compliance Supplement, section IV, 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. Condition: Our testing over activities allowed and allowable costs identified three expenditures that were not approved under the grant per communications from the Federal Emergency Management Agency (FEMA). The City is currently appealing FEMA’s decision and pending project approval. For purposes of reporting expenditures on the Schedule of Expenditures of Federal Awards (SEFA), the City has removed total costs of $638,418 for the FEMA grant until obligations are approved. Cause: There was a lapse in oversight of the internal control process ensuring only obligated FEMA expenditures are reported on the SEFA. Effect: The City’s control did not detect or correct the errors identified, which resulted in expenditures being allocated to the federal award that were not obligated. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A haphazard sample of six transactions were selected for testing, which accounted for $729,981 of the original $965,040 reported as federal program expenditures. As a result of testing and review of the SEFA, the City revised the SEFA to only include approved obligations in the amount of $326,622. Repeat Finding from Prior Year(s): No. Recommendation: We recommend the City review and strengthen the controls surrounding expenditures being claimed under the grant and ensuring expenditures are obligated before being reported on the SEFA. Views of Responsible Officials: Management’s Response: See separate corrective action plan.
Program: Housing Voucher Cluster Federal Financial Assistance Listing No.: 14.871, 14.879 Federal Agency: U.S. Department of Housing and Urban Development Passed-through: n/a – direct award Award Number and Year: CA131, 2023/2024 Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 170 establishes requirements for recipients’ reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA). Condition: We identified that the FFATA reporting was not completed as required by 2 CFR Part 170 for the following instances: Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 1 1 1 1 1 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $3,506,689 $3,506,689 $3,506,689 $3,506,689 $3,506,689 Cause: Management asserted that the County’s award is not available in the FFATA portal; therefore, they are unable to submit the FFATA reports for the subrecipient of this grant. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate, or incomplete being submitted to the federal agency. Questioned Costs: None reported. Context/Sampling: We tested 100% of all subrecipients. Repeat Finding from Prior Year(s): Yes, prior year finding 2023-003. Recommendation: We recommend that management strengthen their processes and procedures related to the submission of the required FFATA reports to ensure compliance with the program requirements. We also recommend that management establish documented review of the required FFATA reports by an individual other than the preparer prior to submission and retain record of the review and submission. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.
Program: Housing Voucher Cluster Federal Financial Assistance Listing No.: 14.871, 14.879 Federal Agency: U.S. Department of Housing and Urban Development Passed-through: n/a – direct award Award Number and Year: CA131, 2023/2024 Compliance Requirement: Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 170 establishes requirements for recipients’ reporting of information on subawards as required by the Federal Funding Accountability and Transparency Act of 2006 (FFATA). Condition: We identified that the FFATA reporting was not completed as required by 2 CFR Part 170 for the following instances: Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 1 1 1 1 1 Dollar Amount of Tested Transactions Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements $3,506,689 $3,506,689 $3,506,689 $3,506,689 $3,506,689 Cause: Management asserted that the County’s award is not available in the FFATA portal; therefore, they are unable to submit the FFATA reports for the subrecipient of this grant. Effect: Ineffective controls over this area of compliance could result in reports that are inaccurate, or incomplete being submitted to the federal agency. Questioned Costs: None reported. Context/Sampling: We tested 100% of all subrecipients. Repeat Finding from Prior Year(s): Yes, prior year finding 2023-003. Recommendation: We recommend that management strengthen their processes and procedures related to the submission of the required FFATA reports to ensure compliance with the program requirements. We also recommend that management establish documented review of the required FFATA reports by an individual other than the preparer prior to submission and retain record of the review and submission. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.
Program: Special Supplemental Nutrition Program for Women, Infants, and Children Federal Financial Assistance Listing No.: 10.557 Federal Agency: US Department of Agriculture Passed-through: California Department of Public Health Award Number and Year: 22-10294 Compliance Requirement: Procurement, Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Instance of Noncompliance Criteria: Per 2 CFR part 200, subpart D, section 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award is compliance with federal statues, regulations, and the terms and conditions of the federal award. 2 CFR 200.318(i) Procurement records. The recipient or subrecipient must maintain records sufficient to detail the history of each procurement transaction. These records must include the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Condition: As a result of our procurement testing, we identified one (1) instance out of a population of one (1) where the County did not document the history of the procurement, including the rationale for method of procurement, selection of contract type, basis for contractor selection, and basis for the contract price. Cause: The County’s procurement policy and procedures do not comply with the uniform guidance requirements to obtain document the history of each procurement transaction. Effect: The County did not comply with the procurement, suspension and debarment requirements. Questioned Costs: None reported. Context/Sampling: The condition noted above was found during our testing procedures over procurement. We selected 100% of the procurements in the year under audit. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the County strengthen its policies and procedures to ensure that the history of each procurement transaction. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.
Program: Foster Care Federal Financial Assistance Listing No.: 93.658 Federal Agency: U.S. Department of Health and Human Services Passed-through: California Department of Social Services Award Number and Year: 1946001347 A7, 2023/2024 Compliance Requirement: Allowable Activities and Allowed Costs Type of Finding: Material Weakness in Internal Control over Compliance, Instance of Noncompliance Criteria: Per 2 CFR part 200, subpart D, section 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award is compliance with federal statues, regulations, and the terms and conditions of the federal award. This includes internal controls to ensure that federal funds are used only for federally eligible cases. Condition: As a result of our allowable activities and allowed cost testing, we noted one (1) out of 60 benefit payments which was paid to an eligible participant for federal benefits. Cause: The County transitioned to the California Statewide Automated Welfare System (CalSAWS) in the fiscal year 2024. During this transition, the case was inadvertently converted to a federal case in error. Effect: The County did not comply with the allowed activities and allowable costs requirements. Questioned Costs: Known questioned costs were $1,319. Projected questioned costs were $25,151. Context/Sampling: The condition noted above was found during our testing procedures over allowable activities and allowed costs. A sample of 60 benefit payments out of a population 2,293 were selected for testing. Our sample represented benefit payments of $53,252 out of $2,036,487. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the County strengthen its current policies and procedures with regards reviewing cases for federal eligibility prior to authorizing payment of benefits. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.
2024-001: Internal Controls over Compliance for Allowable Costs Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Health and Senior Services Federal Assistance Listing Number: 93.044/93.045/93.053 Program Title: Aging Cluster Pass-through Entity Identifying Number: ERS1052004 Award Year: 2024 Questioned Costs: None Criteria: 2 CFR 200.303 states, “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.” Condition: During our audit, we noted instances of deviations from documented internal control policies and management override of internal controls: • The former Executive Director implemented a 36-hour work week policy by closing the administrative offices at noon every Friday effective January 1, 2024. However, the Agency’s Personnel Policies and Administrative Procedures, Guidelines and Benefits manual was not updated to reflect this change from a 40-hour to a 36-hour work week. Employees recorded 4 hours of “Other Paid Leave” on their timesheets every Friday for the time the offices were closed. We also noted that employees recorded “Other Paid Leave” for the Friday after Thanksgiving during the fiscal year. This was not one of the officially recognized paid holidays in the adopted policy manual. • The Agency did not follow the prescribed procedures for reviewing and paying credit card charges during the year. The Agency’s Accounting Manual calls for all receipts for credit card charges to be submitted to the CFO to verify the charges on the monthly statement prior to paying the credit card bill. However, during the fiscal year there were instances noted where the former Executive Director made credit card payments online, circumventing the Agency’s accounts payable process. The Accounting Manual also prohibits unauthorized charges to the company credit card, such as personal expenditures. We noted $3,171 of personal charges made by the former Executive Director to the company credit card in the general ledger. These charges were recorded as prepaid expenses in the accounting system and therefore were not charged to federal awards. The former CFO would reduce the Executive Director’s paycheck to reimburse the company for any personal charges noted on the credit card. Cause: The November 2023 Board minutes mention the Executive Director’s plan for going to a 36-hour work week effective January 1, 2024, however, the Board did not approve the policy at that time and the Agency’s personnel policy manual was not updated and approved by the Board. The June 2024 Board minutes reflect an approved motion by the Board to approve the 36-hour work week and the policy manual was updated to reflect the 36-hour work week in October 2024. The revised policy manual also reflects 14 paid holidays, which was increased from the 11 paid holidays noted in the prior version of the manual. During the fiscal year, there was management override of the prescribed internal controls regarding charges to the company credit card. Effect: Internal controls over compliance that can prevent and detect noncompliance with federal statutes, regulations and the terms and conditions of the Agency’s federal awards are necessary to ensure that only allowable and authorized expenses are charged to federal awards. Recommendation: We recommend that the Agency implement procedures to ensure that the prescribed internal controls, policies and procedures officially adopted by the Board of Directors are implemented and consistently followed.
2024-001: Internal Controls over Compliance for Allowable Costs Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Health and Senior Services Federal Assistance Listing Number: 93.044/93.045/93.053 Program Title: Aging Cluster Pass-through Entity Identifying Number: ERS1052004 Award Year: 2024 Questioned Costs: None Criteria: 2 CFR 200.303 states, “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.” Condition: During our audit, we noted instances of deviations from documented internal control policies and management override of internal controls: • The former Executive Director implemented a 36-hour work week policy by closing the administrative offices at noon every Friday effective January 1, 2024. However, the Agency’s Personnel Policies and Administrative Procedures, Guidelines and Benefits manual was not updated to reflect this change from a 40-hour to a 36-hour work week. Employees recorded 4 hours of “Other Paid Leave” on their timesheets every Friday for the time the offices were closed. We also noted that employees recorded “Other Paid Leave” for the Friday after Thanksgiving during the fiscal year. This was not one of the officially recognized paid holidays in the adopted policy manual. • The Agency did not follow the prescribed procedures for reviewing and paying credit card charges during the year. The Agency’s Accounting Manual calls for all receipts for credit card charges to be submitted to the CFO to verify the charges on the monthly statement prior to paying the credit card bill. However, during the fiscal year there were instances noted where the former Executive Director made credit card payments online, circumventing the Agency’s accounts payable process. The Accounting Manual also prohibits unauthorized charges to the company credit card, such as personal expenditures. We noted $3,171 of personal charges made by the former Executive Director to the company credit card in the general ledger. These charges were recorded as prepaid expenses in the accounting system and therefore were not charged to federal awards. The former CFO would reduce the Executive Director’s paycheck to reimburse the company for any personal charges noted on the credit card. Cause: The November 2023 Board minutes mention the Executive Director’s plan for going to a 36-hour work week effective January 1, 2024, however, the Board did not approve the policy at that time and the Agency’s personnel policy manual was not updated and approved by the Board. The June 2024 Board minutes reflect an approved motion by the Board to approve the 36-hour work week and the policy manual was updated to reflect the 36-hour work week in October 2024. The revised policy manual also reflects 14 paid holidays, which was increased from the 11 paid holidays noted in the prior version of the manual. During the fiscal year, there was management override of the prescribed internal controls regarding charges to the company credit card. Effect: Internal controls over compliance that can prevent and detect noncompliance with federal statutes, regulations and the terms and conditions of the Agency’s federal awards are necessary to ensure that only allowable and authorized expenses are charged to federal awards. Recommendation: We recommend that the Agency implement procedures to ensure that the prescribed internal controls, policies and procedures officially adopted by the Board of Directors are implemented and consistently followed.
2024-001: Internal Controls over Compliance for Allowable Costs Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Health and Senior Services Federal Assistance Listing Number: 93.044/93.045/93.053 Program Title: Aging Cluster Pass-through Entity Identifying Number: ERS1052004 Award Year: 2024 Questioned Costs: None Criteria: 2 CFR 200.303 states, “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.” Condition: During our audit, we noted instances of deviations from documented internal control policies and management override of internal controls: • The former Executive Director implemented a 36-hour work week policy by closing the administrative offices at noon every Friday effective January 1, 2024. However, the Agency’s Personnel Policies and Administrative Procedures, Guidelines and Benefits manual was not updated to reflect this change from a 40-hour to a 36-hour work week. Employees recorded 4 hours of “Other Paid Leave” on their timesheets every Friday for the time the offices were closed. We also noted that employees recorded “Other Paid Leave” for the Friday after Thanksgiving during the fiscal year. This was not one of the officially recognized paid holidays in the adopted policy manual. • The Agency did not follow the prescribed procedures for reviewing and paying credit card charges during the year. The Agency’s Accounting Manual calls for all receipts for credit card charges to be submitted to the CFO to verify the charges on the monthly statement prior to paying the credit card bill. However, during the fiscal year there were instances noted where the former Executive Director made credit card payments online, circumventing the Agency’s accounts payable process. The Accounting Manual also prohibits unauthorized charges to the company credit card, such as personal expenditures. We noted $3,171 of personal charges made by the former Executive Director to the company credit card in the general ledger. These charges were recorded as prepaid expenses in the accounting system and therefore were not charged to federal awards. The former CFO would reduce the Executive Director’s paycheck to reimburse the company for any personal charges noted on the credit card. Cause: The November 2023 Board minutes mention the Executive Director’s plan for going to a 36-hour work week effective January 1, 2024, however, the Board did not approve the policy at that time and the Agency’s personnel policy manual was not updated and approved by the Board. The June 2024 Board minutes reflect an approved motion by the Board to approve the 36-hour work week and the policy manual was updated to reflect the 36-hour work week in October 2024. The revised policy manual also reflects 14 paid holidays, which was increased from the 11 paid holidays noted in the prior version of the manual. During the fiscal year, there was management override of the prescribed internal controls regarding charges to the company credit card. Effect: Internal controls over compliance that can prevent and detect noncompliance with federal statutes, regulations and the terms and conditions of the Agency’s federal awards are necessary to ensure that only allowable and authorized expenses are charged to federal awards. Recommendation: We recommend that the Agency implement procedures to ensure that the prescribed internal controls, policies and procedures officially adopted by the Board of Directors are implemented and consistently followed.
2024-001: Internal Controls over Compliance for Allowable Costs Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Health and Senior Services Federal Assistance Listing Number: 93.044/93.045/93.053 Program Title: Aging Cluster Pass-through Entity Identifying Number: ERS1052004 Award Year: 2024 Questioned Costs: None Criteria: 2 CFR 200.303 states, “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.” Condition: During our audit, we noted instances of deviations from documented internal control policies and management override of internal controls: • The former Executive Director implemented a 36-hour work week policy by closing the administrative offices at noon every Friday effective January 1, 2024. However, the Agency’s Personnel Policies and Administrative Procedures, Guidelines and Benefits manual was not updated to reflect this change from a 40-hour to a 36-hour work week. Employees recorded 4 hours of “Other Paid Leave” on their timesheets every Friday for the time the offices were closed. We also noted that employees recorded “Other Paid Leave” for the Friday after Thanksgiving during the fiscal year. This was not one of the officially recognized paid holidays in the adopted policy manual. • The Agency did not follow the prescribed procedures for reviewing and paying credit card charges during the year. The Agency’s Accounting Manual calls for all receipts for credit card charges to be submitted to the CFO to verify the charges on the monthly statement prior to paying the credit card bill. However, during the fiscal year there were instances noted where the former Executive Director made credit card payments online, circumventing the Agency’s accounts payable process. The Accounting Manual also prohibits unauthorized charges to the company credit card, such as personal expenditures. We noted $3,171 of personal charges made by the former Executive Director to the company credit card in the general ledger. These charges were recorded as prepaid expenses in the accounting system and therefore were not charged to federal awards. The former CFO would reduce the Executive Director’s paycheck to reimburse the company for any personal charges noted on the credit card. Cause: The November 2023 Board minutes mention the Executive Director’s plan for going to a 36-hour work week effective January 1, 2024, however, the Board did not approve the policy at that time and the Agency’s personnel policy manual was not updated and approved by the Board. The June 2024 Board minutes reflect an approved motion by the Board to approve the 36-hour work week and the policy manual was updated to reflect the 36-hour work week in October 2024. The revised policy manual also reflects 14 paid holidays, which was increased from the 11 paid holidays noted in the prior version of the manual. During the fiscal year, there was management override of the prescribed internal controls regarding charges to the company credit card. Effect: Internal controls over compliance that can prevent and detect noncompliance with federal statutes, regulations and the terms and conditions of the Agency’s federal awards are necessary to ensure that only allowable and authorized expenses are charged to federal awards. Recommendation: We recommend that the Agency implement procedures to ensure that the prescribed internal controls, policies and procedures officially adopted by the Board of Directors are implemented and consistently followed.
2024-001: Internal Controls over Compliance for Allowable Costs Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Missouri Department of Health and Senior Services Federal Assistance Listing Number: 93.044/93.045/93.053 Program Title: Aging Cluster Pass-through Entity Identifying Number: ERS1052004 Award Year: 2024 Questioned Costs: None Criteria: 2 CFR 200.303 states, “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.” Condition: During our audit, we noted instances of deviations from documented internal control policies and management override of internal controls: • The former Executive Director implemented a 36-hour work week policy by closing the administrative offices at noon every Friday effective January 1, 2024. However, the Agency’s Personnel Policies and Administrative Procedures, Guidelines and Benefits manual was not updated to reflect this change from a 40-hour to a 36-hour work week. Employees recorded 4 hours of “Other Paid Leave” on their timesheets every Friday for the time the offices were closed. We also noted that employees recorded “Other Paid Leave” for the Friday after Thanksgiving during the fiscal year. This was not one of the officially recognized paid holidays in the adopted policy manual. • The Agency did not follow the prescribed procedures for reviewing and paying credit card charges during the year. The Agency’s Accounting Manual calls for all receipts for credit card charges to be submitted to the CFO to verify the charges on the monthly statement prior to paying the credit card bill. However, during the fiscal year there were instances noted where the former Executive Director made credit card payments online, circumventing the Agency’s accounts payable process. The Accounting Manual also prohibits unauthorized charges to the company credit card, such as personal expenditures. We noted $3,171 of personal charges made by the former Executive Director to the company credit card in the general ledger. These charges were recorded as prepaid expenses in the accounting system and therefore were not charged to federal awards. The former CFO would reduce the Executive Director’s paycheck to reimburse the company for any personal charges noted on the credit card. Cause: The November 2023 Board minutes mention the Executive Director’s plan for going to a 36-hour work week effective January 1, 2024, however, the Board did not approve the policy at that time and the Agency’s personnel policy manual was not updated and approved by the Board. The June 2024 Board minutes reflect an approved motion by the Board to approve the 36-hour work week and the policy manual was updated to reflect the 36-hour work week in October 2024. The revised policy manual also reflects 14 paid holidays, which was increased from the 11 paid holidays noted in the prior version of the manual. During the fiscal year, there was management override of the prescribed internal controls regarding charges to the company credit card. Effect: Internal controls over compliance that can prevent and detect noncompliance with federal statutes, regulations and the terms and conditions of the Agency’s federal awards are necessary to ensure that only allowable and authorized expenses are charged to federal awards. Recommendation: We recommend that the Agency implement procedures to ensure that the prescribed internal controls, policies and procedures officially adopted by the Board of Directors are implemented and consistently followed.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A230133, P033A230133, P063P230512, P063Q230512, and P268K230512 July 1, 2023 through June 30, 2024 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions - return of Title IV funds Questioned costs: $943 Condition—Contrary to federal regulation and the District’s policies and procedures, the District’s Financial Aid and Scholarships Department (Department) did not return $943 of Student Financial Assistance’s (SFA) Title IV funds for 1 student who received grants and loans and withdrew during a payment period or period of enrollment in which the student began attendance.1 Specifically, for 1 of 25 students tested, the District did not complete the required calculation and return the $943 unearned portion of a student’s $3,698 original Pell grant award to the U.S. Department of Education (ED) after the student withdrew from the District. Effect—The District’s not returning $943 of Title IV funds to ED resulted in Title IV funds not being spent as intended by program requirements. Further, there is an increased risk that the District may need to return additional Title IV funds to ED. For example, the Department’s Management reported that it identified an additional 81 students, or $153,318 in Title IV funds, for whom it did not perform required calculations during the period November 2023 through June 30, 2024. This includes $143,509 in Pell Grants, $5,718 in Direct Loans, $3,716 in Federal Work Study, and $375 in Federal Supplemental Educational Opportunity Grants that may not have been spent as intended by program requirements. Cause—The District’s student information system’s automated controls did not flag students who withdrew and required a return to Title IV calculation. In November 2023, the District made changes to its student information system without performing tests to ensure the automated controls were properly identifying and flagging students who withdrew. Criteria—Federal regulation and District policies and procedures require the return of Title IV funds when a recipient of Title IV grant or loan assistance withdraws from the District during a payment period or period of enrollment in which the recipient began attendance. Specifically, the District must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs (34 Code of Federal Regulations [CFR] §668.22[a][1-5]).2 Further, 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 Department should: 1. Perform calculations for all students who received Title IV funds and withdrew during the period November 2023 through June 2024 and immediately return all unearned aid to ED. 2. Review and update the student information system’s automated controls to properly identify and flag all students who receive Title IV funds and withdraw from the District. 3. Test any changes made to the student information system and verify controls are operating as designed to comply with the SFA cluster’s requirements. 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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Title IV programs as part of the Student Financial Assistance cluster are administered by the Department of Education (those with Assistance Listings beginning with 84) and authorized by Title IV of the Higher Education Act of 1965, as amended (HEA), and collectively are referred to as the “Title IV programs.” 2 Pima County Community College District. (2023). Pima County Community College District Policy and Procedures 2023-2024 V2. Page 253 of 272.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A230133, P033A230133, P063P230512, P063Q230512, and P268K230512 July 1, 2023 through June 30, 2024 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions - return of Title IV funds Questioned costs: $943 Condition—Contrary to federal regulation and the District’s policies and procedures, the District’s Financial Aid and Scholarships Department (Department) did not return $943 of Student Financial Assistance’s (SFA) Title IV funds for 1 student who received grants and loans and withdrew during a payment period or period of enrollment in which the student began attendance.1 Specifically, for 1 of 25 students tested, the District did not complete the required calculation and return the $943 unearned portion of a student’s $3,698 original Pell grant award to the U.S. Department of Education (ED) after the student withdrew from the District. Effect—The District’s not returning $943 of Title IV funds to ED resulted in Title IV funds not being spent as intended by program requirements. Further, there is an increased risk that the District may need to return additional Title IV funds to ED. For example, the Department’s Management reported that it identified an additional 81 students, or $153,318 in Title IV funds, for whom it did not perform required calculations during the period November 2023 through June 30, 2024. This includes $143,509 in Pell Grants, $5,718 in Direct Loans, $3,716 in Federal Work Study, and $375 in Federal Supplemental Educational Opportunity Grants that may not have been spent as intended by program requirements. Cause—The District’s student information system’s automated controls did not flag students who withdrew and required a return to Title IV calculation. In November 2023, the District made changes to its student information system without performing tests to ensure the automated controls were properly identifying and flagging students who withdrew. Criteria—Federal regulation and District policies and procedures require the return of Title IV funds when a recipient of Title IV grant or loan assistance withdraws from the District during a payment period or period of enrollment in which the recipient began attendance. Specifically, the District must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs (34 Code of Federal Regulations [CFR] §668.22[a][1-5]).2 Further, 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 Department should: 1. Perform calculations for all students who received Title IV funds and withdrew during the period November 2023 through June 2024 and immediately return all unearned aid to ED. 2. Review and update the student information system’s automated controls to properly identify and flag all students who receive Title IV funds and withdraw from the District. 3. Test any changes made to the student information system and verify controls are operating as designed to comply with the SFA cluster’s requirements. 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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Title IV programs as part of the Student Financial Assistance cluster are administered by the Department of Education (those with Assistance Listings beginning with 84) and authorized by Title IV of the Higher Education Act of 1965, as amended (HEA), and collectively are referred to as the “Title IV programs.” 2 Pima County Community College District. (2023). Pima County Community College District Policy and Procedures 2023-2024 V2. Page 253 of 272.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A230133, P033A230133, P063P230512, P063Q230512, and P268K230512 July 1, 2023 through June 30, 2024 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions - return of Title IV funds Questioned costs: $943 Condition—Contrary to federal regulation and the District’s policies and procedures, the District’s Financial Aid and Scholarships Department (Department) did not return $943 of Student Financial Assistance’s (SFA) Title IV funds for 1 student who received grants and loans and withdrew during a payment period or period of enrollment in which the student began attendance.1 Specifically, for 1 of 25 students tested, the District did not complete the required calculation and return the $943 unearned portion of a student’s $3,698 original Pell grant award to the U.S. Department of Education (ED) after the student withdrew from the District. Effect—The District’s not returning $943 of Title IV funds to ED resulted in Title IV funds not being spent as intended by program requirements. Further, there is an increased risk that the District may need to return additional Title IV funds to ED. For example, the Department’s Management reported that it identified an additional 81 students, or $153,318 in Title IV funds, for whom it did not perform required calculations during the period November 2023 through June 30, 2024. This includes $143,509 in Pell Grants, $5,718 in Direct Loans, $3,716 in Federal Work Study, and $375 in Federal Supplemental Educational Opportunity Grants that may not have been spent as intended by program requirements. Cause—The District’s student information system’s automated controls did not flag students who withdrew and required a return to Title IV calculation. In November 2023, the District made changes to its student information system without performing tests to ensure the automated controls were properly identifying and flagging students who withdrew. Criteria—Federal regulation and District policies and procedures require the return of Title IV funds when a recipient of Title IV grant or loan assistance withdraws from the District during a payment period or period of enrollment in which the recipient began attendance. Specifically, the District must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs (34 Code of Federal Regulations [CFR] §668.22[a][1-5]).2 Further, 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 Department should: 1. Perform calculations for all students who received Title IV funds and withdrew during the period November 2023 through June 2024 and immediately return all unearned aid to ED. 2. Review and update the student information system’s automated controls to properly identify and flag all students who receive Title IV funds and withdraw from the District. 3. Test any changes made to the student information system and verify controls are operating as designed to comply with the SFA cluster’s requirements. 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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Title IV programs as part of the Student Financial Assistance cluster are administered by the Department of Education (those with Assistance Listings beginning with 84) and authorized by Title IV of the Higher Education Act of 1965, as amended (HEA), and collectively are referred to as the “Title IV programs.” 2 Pima County Community College District. (2023). Pima County Community College District Policy and Procedures 2023-2024 V2. Page 253 of 272.
Cluster name: Student Financial Assistance Cluster Assistance Listings numbers and names: 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award numbers and year: P007A230133, P033A230133, P063P230512, P063Q230512, and P268K230512 July 1, 2023 through June 30, 2024 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions - return of Title IV funds Questioned costs: $943 Condition—Contrary to federal regulation and the District’s policies and procedures, the District’s Financial Aid and Scholarships Department (Department) did not return $943 of Student Financial Assistance’s (SFA) Title IV funds for 1 student who received grants and loans and withdrew during a payment period or period of enrollment in which the student began attendance.1 Specifically, for 1 of 25 students tested, the District did not complete the required calculation and return the $943 unearned portion of a student’s $3,698 original Pell grant award to the U.S. Department of Education (ED) after the student withdrew from the District. Effect—The District’s not returning $943 of Title IV funds to ED resulted in Title IV funds not being spent as intended by program requirements. Further, there is an increased risk that the District may need to return additional Title IV funds to ED. For example, the Department’s Management reported that it identified an additional 81 students, or $153,318 in Title IV funds, for whom it did not perform required calculations during the period November 2023 through June 30, 2024. This includes $143,509 in Pell Grants, $5,718 in Direct Loans, $3,716 in Federal Work Study, and $375 in Federal Supplemental Educational Opportunity Grants that may not have been spent as intended by program requirements. Cause—The District’s student information system’s automated controls did not flag students who withdrew and required a return to Title IV calculation. In November 2023, the District made changes to its student information system without performing tests to ensure the automated controls were properly identifying and flagging students who withdrew. Criteria—Federal regulation and District policies and procedures require the return of Title IV funds when a recipient of Title IV grant or loan assistance withdraws from the District during a payment period or period of enrollment in which the recipient began attendance. Specifically, the District must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs (34 Code of Federal Regulations [CFR] §668.22[a][1-5]).2 Further, 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 Department should: 1. Perform calculations for all students who received Title IV funds and withdrew during the period November 2023 through June 2024 and immediately return all unearned aid to ED. 2. Review and update the student information system’s automated controls to properly identify and flag all students who receive Title IV funds and withdraw from the District. 3. Test any changes made to the student information system and verify controls are operating as designed to comply with the SFA cluster’s requirements. 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 and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Title IV programs as part of the Student Financial Assistance cluster are administered by the Department of Education (those with Assistance Listings beginning with 84) and authorized by Title IV of the Higher Education Act of 1965, as amended (HEA), and collectively are referred to as the “Title IV programs.” 2 Pima County Community College District. (2023). Pima County Community College District Policy and Procedures 2023-2024 V2. Page 253 of 272.
New York City Human Resources Administration (“HRA”) Finding #: 2024-007 Funding Year(s): 9/1/2020 - 9/1/2028 HOME Investment Partnerships Program (FAL #14.239) Contract Numbers: M-20-MC-36-0204 Federal Agency: U.S. Department of Housing and Urban Development Type of Finding: Allowable Costs and Eligibility - Compliance and Internal Control (Significant Deficiency) Criteria: In accordance with 23 CFR sections 1.9, 172.11(a), 420.113(a), and 630.106(a), costs incurred under federal awards are considered allowable and reimbursable when such costs are deemed necessary and reasonable; incurred subsequent to the date of authorization to proceed and in accordance with the conditions contained in the project agreement and the plans specifications; and, not included as costs used to meet cost sharing or matching requirements, among other things. As stipulated by 24 CFR §92.209, tenant-based rental assistance (“TBRA”) may only be provided to very low- and low-income families. The participating jurisdiction must determine that the family is very low- or low-income before the assistance is provided. During the period of assistance, the participating jurisdiction must annually determine that the family continues to be low-income. Also, the maximum monthly assistance that a participating jurisdiction may pay to, or on behalf of, a family may not exceed the difference between a rent standard for the unit size established by the participating jurisdiction and 30% of the family's monthly adjusted income. Additionally, the participating jurisdiction must disapprove a lease if the rent is not reasonable, based on rents that are charged for comparable unassisted rental units. Additionally, as stipulated by 2 CFR Section 200.303, recipients of federal awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: The New York City Human Resources Administration (“HRA”) utilizes the Current System to assess beneficiaries’ eligibility to receive TBRA through the HOME Investment Partnerships Program (“HOME”). To assess eligibility, HRA program staff obtain income supporting documentation to determine if the household met the low-income requirement and to calculate the maximum subsidy amount to be paid by HRA. Additionally, a rent reasonableness valuation is performed which compares the current beneficiary’s rent to other rents charged for comparable units to ensure reasonableness. Upon the completion of the eligibility determination by an HRA staff member, a designated program supervisor reviews and approves the eligibility determination, subsidy amount, and tenant share within the Current System. In the prior year, a material weakness in internal controls was identified concerning incorrect TBRA payments. Our inquiries with management during the current year revealed that no improvements were made to the operating effectiveness of this internal control process. In fiscal 2024, total TBRA payments charged to the grant were $3,742,133, which is not material to the program overall. Cause/Effect: While HRA has a process in place to assess the eligibility of tenants and calculate the monthly TBRA payments on behalf of those tenants to ensure allowability of costs incurred, a comprehensive review was not consistently performed to support those determinations and calculations. As a result, costs were incurred on behalf of certain tenants that may not have met the eligibility requirements, or an incorrect amount may have been paid on their behalf. Questioned Costs: None noted. Identification as a Repeat Finding: This finding is similar to finding #2023-002, included on pages 225 through 226 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that HRA strengthen their internal controls governing the eligibility determination and monthly TBRA payment calculation process, including creating a comprehensive review checklist to ensure each tenant meets every eligibility requirement and HRA’s portion of the TBRA payments are properly calculated, and that appropriate supervisory review and approval is consistently performed and documented prior to processing payments and charging costs to the grant.
New York City Housing Preservation & Development (“HPD”) Finding #: 2024-005 Funding Year(s): 7/1/2023 – 6/30/2024 Section 8 Project-Based Cluster: Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249) Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856) Contract Numbers: N/A Federal Agency: U.S. Department of Housing and Urban Development (“HUD”) Type of Finding: Eligibility and Reporting - Material Noncompliance and Internal Control (Material Weakness) Criteria: As stipulated by 24 CFR Section 880.603, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants by (a) obtaining signed applications; (b) conducting verifications of family income and other pertinent information; (c) documenting inspections and tenant certifications, as appropriate; and, (d) determining that tenant income did not exceed the maximum limit set by HUD. HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, the HUD 50058 form, titled Family Report is used by Public Housing Agencies (PHAs) to collect information on families receiving house assistance through the program and submission is required before the effective date of the annual recertification. Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period. The HUD 50058 form is submitted upon completion of the annual recertification to update family income, composition and rent calculations. We selected a non-statistical sample of forty (40) tenants who received HAPs under the Section 8 Project-Based Cluster during fiscal year 2024. For eighteen (18) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the HAP calculation, was performed within the previous 12 months, as required. For those eighteen (18) tenants, HPD did not submit the HUD 50058 form by the effective date of the annual recertification as required. Cause/Effect: While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Section 8 Project-Based Cluster, the reexamination of family income and composition was not consistently performed and HUD 50058 updated and submitted for each tenant at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts. Questioned Costs: None identified. Identification as a Repeat Finding: This finding is similar to finding #2023-014, included on pages 250 and 251 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318. HUD 50058 forms should be submitted before the effective date of the annual recertification of tenants to inform HUD of updates to family income, composition and rent calculations as required.
New York City Housing Preservation & Development (“HPD”) Finding #: 2024-005 Funding Year(s): 7/1/2023 – 6/30/2024 Section 8 Project-Based Cluster: Section 8 Moderate Rehabilitation Single Room Occupancy (FAL #14.249) Lower Income Housing Assistance Program – Section 8 Moderate Rehabilitation (FAL #14.856) Contract Numbers: N/A Federal Agency: U.S. Department of Housing and Urban Development (“HUD”) Type of Finding: Eligibility and Reporting - Material Noncompliance and Internal Control (Material Weakness) Criteria: As stipulated by 24 CFR Section 880.603, prior to providing housing assistance payments (HAP) to participants, HPD must verify the eligibility of applicants by (a) obtaining signed applications; (b) conducting verifications of family income and other pertinent information; (c) documenting inspections and tenant certifications, as appropriate; and, (d) determining that tenant income did not exceed the maximum limit set by HUD. HPD must also reexamine family income and composition for each tenant at least once every 12 months to verify continued eligibility and adjust the HAP amount, as necessary. Further, the HUD 50058 form, titled Family Report is used by Public Housing Agencies (PHAs) to collect information on families receiving house assistance through the program and submission is required before the effective date of the annual recertification. Additionally, as stipulated by 2 CFR Section 200.303, recipients of Federal Awards are required to establish and maintain an internal control environment that complies with either the guidance in “Standards for Internal Control in the Federal Government” (the “Green Book”) 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”) for the federal funding streams it administers. Condition/Context: To assess eligibility, HPD’s policy is to conduct annual recertifications of family income and composition. As part of that process, HPD sends a recertification package to the head of household, which contains documentation that the tenant must complete for verification purposes. HPD then analyzes and verifies all information included in the recertification package to determine if the tenant is eligible to continue to receive HAPs and adjust the tenant rent and HAP amounts as necessary for the following 12-month period. The HUD 50058 form is submitted upon completion of the annual recertification to update family income, composition and rent calculations. We selected a non-statistical sample of forty (40) tenants who received HAPs under the Section 8 Project-Based Cluster during fiscal year 2024. For eighteen (18) of the tenants tested, HPD was not able to provide documentation to support that an eligibility recertification for the tenant, including a review of the HAP calculation, was performed within the previous 12 months, as required. For those eighteen (18) tenants, HPD did not submit the HUD 50058 form by the effective date of the annual recertification as required. Cause/Effect: While HPD has a process in place to assess the eligibility of tenants receiving HAPs under the Section 8 Project-Based Cluster, the reexamination of family income and composition was not consistently performed and HUD 50058 updated and submitted for each tenant at least once every 12 months to support the tenant’s continued eligibility to receive benefits through this program at the appropriate amounts. Questioned Costs: None identified. Identification as a Repeat Finding: This finding is similar to finding #2023-014, included on pages 250 and 251 of the Fiscal 2023 Single Audit report. Recommendation: We recommend that HPD strengthen their internal controls governing the eligibility requirements, including implementing a control to ensure recertifications of family income and composition are performed at least once every 12 months and the tenants HAP amount is adjusted as necessary to meet the eligibility requirements per 24 CFR sections 880.603, 881.601, 882.514, 882.808, 833.701, 884.214, 886.119, and 886.318. HUD 50058 forms should be submitted before the effective date of the annual recertification of tenants to inform HUD of updates to family income, composition and rent calculations as required.