Program: COVID-19 Health Center Program Cluster Assistance Listing No.: 93.224; 93.527 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No.: 4 H8GCS48295‐01‐01 Award Year: 12/01/2022 ‐ 12/31/2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 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. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For one (1) out of three (3) contracts selected for testing, there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For one (1) out of three (3) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of three (3) contracts selected for testing with a total contract value of $2,616,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of three (3) procurement contracts were tested. This represented a total of $21,679,640 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 Health Center Program Cluster Assistance Listing No.: 93.224; 93.527 Federal Grantor: U.S. Department of Health and Human Services Passed-through: N/A Award No.: 4 H8GCS48295‐01‐01 Award Year: 12/01/2022 ‐ 12/31/2023 Compliance Requirement: Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance and Material Non-Compliance Criteria: 2 CFR section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Title 2 CFR Section 200.214 of the Uniform Guidance states that the County must comply with 2 CFR part 180, which implements Executive Orders 12549 and 12689. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR Section 180.300, when a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.sam.gov/SAM/, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity. 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. 2 CFR 200.327 Contract provisions. The recipient's or subrecipient's contracts must contain the applicable provisions described in Appendix II to Part 200—Contract Provisions for Non-Federal Entity Contracts Under Federal Awards. Condition: During our testing of the County’s provisions for procurement requirements, we noted the following: 1. For one (1) out of three (3) contracts selected for testing, there was no evidence that the County verified the entity was not suspended or debarred or otherwise excluded from participating in the transaction, prior to entering the contract. 2. For one (1) out of three (3) contracts selected for testing, the County did not include all applicable provisions described in 2 CFR 200 Appendix II. 3. For one (1) out of three (3) contracts selected for testing with a total contract value of $2,616,000, the County could not provide documentation of the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. Cause: The County did not follow their policy to verify the information described in the condition prior to entering the transactions. The County did not follow their policy documenting the history of the procurement, including the rationale for the method of procurement, selection of contract type, basis for contractor selection, and the basis for the contract price. The County’s policy does not include the requirement to include all applicable provisions identified in 2 CFR 200 Appendix II in its contracts. Effect: Failure to implement and maintain a proper control process could result in payments to vendors that are suspended or debarred or improper awarding of contracts under the procurement guidance. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of three (3) out of three (3) procurement contracts were tested. This represented a total of $21,679,640 in contracted services under the grant. Repeat Finding from Prior Years: No. Recommendation: We recommend the County strengthen its policies and procedures to ensure that the verification of the debarment and suspension is documented and retained, the history of procurement transactions is documented and retained in its official records, and that contracts include all applicable provisions of 2 CFR 200 Appendix II. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: COVID-19 - Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: California Governor's Office of Emergency Services Award No. and Year: Affects all grant awards included under assistance listing 97.036 on the Schedule of Expenditures of Federal Awards. Compliance Requirement: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards Type of Finding: Material Weakness in Internal Control Over Compliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the County) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total federal awards expended (including amounts provided to subrecipients) as determined in accordance with §200.502. In addition, section 200.303 of the Uniform Guidance state that that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition: During our audit procedures performed over the SEFA and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program we noted the County understated expenditures totaling $1,188,371. The June 30, 2024 SEFA was corrected for this reporting error. Cause: The County did not report two Disaster Grants – Public Assistance (Presidentially Declared Disasters) program grants on the SEFA, that were approved by the granting agency during the fiscal year ended June 30, 2024. The County did not have adequate internal controls to ensure the SEFA was prepared completely and accurately. Effect: Prior to the correction, expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) program were understated by $1,188,370. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: No sampling was used; all program expenditures on the SEFA were reconciled to supporting records. Repeat Finding from Prior Years: No. Recommendation: We recommend the County enhance internal controls to ensure federal expenditures are reported accurately and completely on the SEFA in accordance with the OMB Uniform Guidance. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being allowable under the grant terms. Also, an expense was charged to the grant in error. Questioned costs: $16. Context: For 36 of the 60 allowable general disbursement cost transactions selected for testing, there was no documentation showing management's review and approval of the expense as being allowable. For 1 of the 60 general disbursement costs transactions selected for testing, it was charged to the grant in error, causing it to be a questioned cost. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants. Repeat Finding: Repeat Finding of 2023-005. Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show the review and approval of expenses charged to grants, prior to drawing down grant funds. Views of responsible officials: The Organization will continue to review all documentation and ensure proper signatures accompany the documentation going forward.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois Pass-Through Number(s): 20220245; 20220246 Award Period: 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 12/15/2023-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Code of Federal Regulations (CFR) §200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being expensed in the proper grant period. Questioned costs: N/A Context: For 24 of the 35 disbursements tested there was no documentation showing management's review and approval of the expense as being in the proper grant period. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved, it could result in incorrect costs being charged to federal grants. Repeat Finding: N/A Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show invoices were reviewed before paid. Views of responsible officials: The Organization will review our procedures surrounding ensuring that the proper accounting period is recorded for each transaction to identify any failures in the process.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being allowable under the grant terms. Also, an expense was charged to the grant in error. Questioned costs: $16. Context: For 36 of the 60 allowable general disbursement cost transactions selected for testing, there was no documentation showing management's review and approval of the expense as being allowable. For 1 of the 60 general disbursement costs transactions selected for testing, it was charged to the grant in error, causing it to be a questioned cost. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants. Repeat Finding: Repeat Finding of 2023-005. Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show the review and approval of expenses charged to grants, prior to drawing down grant funds. Views of responsible officials: The Organization will continue to review all documentation and ensure proper signatures accompany the documentation going forward.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois Pass-Through Number(s): 20220245; 20220246 Award Period: 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 12/15/2023-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Code of Federal Regulations (CFR) §200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being expensed in the proper grant period. Questioned costs: N/A Context: For 24 of the 35 disbursements tested there was no documentation showing management's review and approval of the expense as being in the proper grant period. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved, it could result in incorrect costs being charged to federal grants. Repeat Finding: N/A Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show invoices were reviewed before paid. Views of responsible officials: The Organization will review our procedures surrounding ensuring that the proper accounting period is recorded for each transaction to identify any failures in the process.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being allowable under the grant terms. Also, an expense was charged to the grant in error. Questioned costs: $16. Context: For 36 of the 60 allowable general disbursement cost transactions selected for testing, there was no documentation showing management's review and approval of the expense as being allowable. For 1 of the 60 general disbursement costs transactions selected for testing, it was charged to the grant in error, causing it to be a questioned cost. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants. Repeat Finding: Repeat Finding of 2023-005. Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show the review and approval of expenses charged to grants, prior to drawing down grant funds. Views of responsible officials: The Organization will continue to review all documentation and ensure proper signatures accompany the documentation going forward.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois Pass-Through Number(s): 20220245; 20220246 Award Period: 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 12/15/2023-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Code of Federal Regulations (CFR) §200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being expensed in the proper grant period. Questioned costs: N/A Context: For 24 of the 35 disbursements tested there was no documentation showing management's review and approval of the expense as being in the proper grant period. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved, it could result in incorrect costs being charged to federal grants. Repeat Finding: N/A Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show invoices were reviewed before paid. Views of responsible officials: The Organization will review our procedures surrounding ensuring that the proper accounting period is recorded for each transaction to identify any failures in the process.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois; Champaign County, Illinois; City of Urbana, Illinois Pass-Through Number(s): 20220245; 02220246; 2224-FF-CO Award Period: 7/1/2023-12/31/2026; 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 3/1/2022-12/31/2024 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being allowable under the grant terms. Also, an expense was charged to the grant in error. Questioned costs: $16. Context: For 36 of the 60 allowable general disbursement cost transactions selected for testing, there was no documentation showing management's review and approval of the expense as being allowable. For 1 of the 60 general disbursement costs transactions selected for testing, it was charged to the grant in error, causing it to be a questioned cost. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants. Repeat Finding: Repeat Finding of 2023-005. Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show the review and approval of expenses charged to grants, prior to drawing down grant funds. Views of responsible officials: The Organization will continue to review all documentation and ensure proper signatures accompany the documentation going forward.
Federal agency: U.S. Treasury Federal program title: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Pass-Through Agency: City of Champaign, Illinois Pass-Through Number(s): 20220245; 20220246 Award Period: 3/1/2023-12/30/2023; 12/15/2023-12/31/2024; 3/1/2022-12/31/2023; 12/15/2023-12/31/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Code of Federal Regulations (CFR) §200.303(a) indicates nonfederal entities 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: Lack of supporting documentation showing management's review and approval of costs as being expensed in the proper grant period. Questioned costs: N/A Context: For 24 of the 35 disbursements tested there was no documentation showing management's review and approval of the expense as being in the proper grant period. Cause: Error by management when reviewing the expenses to document their review on the invoice or other supporting documentation. Effect: If costs are not reviewed and approved, it could result in incorrect costs being charged to federal grants. Repeat Finding: N/A Recommendation: We recommend the Organization enhance its internal controls in order to require the maintaining of appropriate supporting documentation to show invoices were reviewed before paid. Views of responsible officials: The Organization will review our procedures surrounding ensuring that the proper accounting period is recorded for each transaction to identify any failures in the process.
2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 7 CFR § 210.7(c)(1) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under § 210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Three out of thirty (10%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed more meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being over reimbursed $3,662. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 7 CFR § 210.7(c)(1) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under § 210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Three out of thirty (10%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed more meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being over reimbursed $3,662. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
2 CFR § 400.1 gives regulatory effect for the U. S. Department of Agriculture to the Office of Management and Budget guidance in subparts A through F of 2 CFR part 200, as supplemented by this part, as USDA policies and procedures for uniform administrative requirements, cost principles, and audit requirement for Federal awards. 2 CFR § 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain effective internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 7 CFR § 210.7(c)(1) states, in part, to be entitled to reimbursement under this part, each school food authority shall ensure that the Claims for Reimbursement . . . accurately reflects the number of lunches and meal supplements served to eligible children, and the school food authority shall, at a minimum: (iii) Base Claims for Reimbursement on lunch counts, taken daily at the point of service, which correctly identify the number of free, reduced price and paid lunches served to eligible children; (iv) Correctly record, consolidate and report those lunch and supplement counts on the Claim for Reimbursement; and (v) Ensure that Claims for Reimbursement do not request payment for any excess lunches produced, as prohibited in § 210.10(a)(2), or non-Program lunches (i.e., a la carte or adult lunches) or for more than one meal supplement per child per day. 7 CFR § 210.8(c) states the Claim for Reimbursement shall include data in sufficient detail to justify the reimbursement claimed and to enable the State agency to provide the Report of School Program Operations required under § 210.5(d) of this part. Such data shall include, at a minimum, the number of free, reduced price and paid lunches and meal supplements served to eligible children. The claim shall be signed by a school food authority official. Three out of thirty (10%) site claim forms submitted by the District to the Ohio Department of Education were inaccurate, since the District claimed more meals served than what was actually distributed. These errors occurred due to a weakness in internal controls, which failed to ensure site claim forms for reimbursable meals served at each building and submitted by the District to the Ohio Department of Education were entered correctly. Failure to properly report the number of eligible meals resulted in the District being over reimbursed $3,662. The District should implement policies and procedures to help ensure that monthly site claim forms for all District buildings are reviewed and submitted to reflect actual counts for reimbursable meals served.
2024-001: Federal Financial Reporting (FFR) Federal Agency: Department of Health and Human Services Federal Program: Family Planning Services – Title X Federal Assistance Listing Number(s): 93.217 Award Period: July 1, 2023 to June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Compliance – Other Matters Criteria or Specific Requirement: The Code of Federal Regulations, 2 CFR Part 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. In addition, the federal financial reporting (FFR) instructions specify the requirements for accurate reporting. Condition: During our testing, there were multiple inaccuracies identified on the FFR submitted to the funder. Specifically, the Organization was not accurately reporting the federal share of expenditures, its non-federal share requirement and reporting on its program income on its quarterly FFR for the period ending June 30, 2024. Questioned Costs: None Context: The Notice of Awards specified the federal and recipient share of expenditures, and use of program income. This information is required to be reported on the Organization’s federal financial report, but amounts were not reported correctly based on the cumulative award totals. Cause: The Organization was not fully aware of the FFR reporting requirements. It also appears the Organization was completing the FFR based on the cash basis rather than the accrual basis as indicated on the FFR. Effect: The Organization did not report the correct amounts for federal share of expenditures, recipient share of expenditures or program income on its required FFR reporting. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-001. Recommendation: We recommend management review the FFR instructions and develop procedures to ensure the required reporting submitted to the funder is complete and accurate. Additionally, systems should be put in place to both track and report its progress on the non-federal share requirement and any program income. Views of Responsible Official: There is no disagreement with the audit finding.
2024-001: Federal Financial Reporting (FFR) Federal Agency: Department of Health and Human Services Federal Program: Family Planning Services – Title X Federal Assistance Listing Number(s): 93.217 Award Period: July 1, 2023 to June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Compliance – Other Matters Criteria or Specific Requirement: The Code of Federal Regulations, 2 CFR Part 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. In addition, the federal financial reporting (FFR) instructions specify the requirements for accurate reporting. Condition: During our testing, there were multiple inaccuracies identified on the FFR submitted to the funder. Specifically, the Organization was not accurately reporting the federal share of expenditures, its non-federal share requirement and reporting on its program income on its quarterly FFR for the period ending June 30, 2024. Questioned Costs: None Context: The Notice of Awards specified the federal and recipient share of expenditures, and use of program income. This information is required to be reported on the Organization’s federal financial report, but amounts were not reported correctly based on the cumulative award totals. Cause: The Organization was not fully aware of the FFR reporting requirements. It also appears the Organization was completing the FFR based on the cash basis rather than the accrual basis as indicated on the FFR. Effect: The Organization did not report the correct amounts for federal share of expenditures, recipient share of expenditures or program income on its required FFR reporting. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2023-001. Recommendation: We recommend management review the FFR instructions and develop procedures to ensure the required reporting submitted to the funder is complete and accurate. Additionally, systems should be put in place to both track and report its progress on the non-federal share requirement and any program income. Views of Responsible Official: There is no disagreement with the audit finding.
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 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 to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Cluster name: Workforce Innovation and Opportunity Act (WIOA) Cluster Assistance Listings numbers and names: 17.258 WIOA Adult Program 17.259 WIOA Youth Activities 17.278 WIOA Dislocated Worker Formula Grants Award numbers and years: DI21-002286, April 1, 2022 through June 30, 2024; Alert 23-001, July 1, 2023 through June 30, 2024; Alert 23-003, July 1, 2023 through June 30, 2024; Alert 24-002, July 1, 2023 through May 31, 2024 Federal agency: U.S. Department of Labor Pass-through grantor: Arizona Department of Economic Security Questioned costs: N/A Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Pass-through grantors: Arizona Criminal Justice Commission, City of Tucson, Arizona Housing Coalition, and Arizona Department of Public Safety Questioned costs: N/A Assistance Listings number and name: 97.024 COVID-19 - Emergency Food and Shelter National Board Program Award numbers and years: 027200-048, November 1, 2021 through December 30, 2024; 027200-056, April 1, 2023 through February 29, 2024; 23*115, March 1, 2023 through February 29, 2024; 23*154, April 1, 2023 through February 29, 2024 Federal agency: U.S. Department of Homeland Security Pass-through grantor: United Way EFSP Questioned costs: $347,345 Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Questioned costs: N/A Compliance requirement: Subrecipient monitoring Total questioned costs: $347,345 Condition—The County’s Grants Management and Innovation Department (Department) awarded over $29 million to 27 subrecipients during fiscal year 2024, or 29% of the County’s total federal expenditures for the federal programs shown in Table 1 below, but did not perform all the required monitoring of its subrecipients’ activities or compliance with award terms and program requirements. Table 1 Summary of subrecipients by federal program Fiscal year 2024 Federal program name Subrecipient information Total number Number tested Total awards Total federal expenditures Subrecipient awards as a percentage of total federal expenditures Workforce Innovation and Opportunity Act (WIOA) Cluster 4 4 $ 568,095 $12,253,972 4.6% Coronavirus State and Local Fiscal Recovery Funds (SLFRF) 17 7 17,241,445 56,862,338 30.3% Emergency Food and Shelter National Board Program (EFS) 4 4 7,810,673 22,622,229 34.5% Shelter and Services Program (SSP) 2 2 3,560,449 8,172,063 43.5% Total 27 17 $29,180,662 $99,910,602 29.2% While the Department performed some monitoring procedures during the year, those procedures were not sufficient to evaluate its subrecipients’ use of program monies in accordance with the award terms, program requirements, and federal regulations. Specifically, contrary to federal regulations, the Department did not perform the following required monitoring procedures: • Perform monitoring activities based on risk assessments performed—The Department did not perform monitoring activities based on risk assessments performed. Specifically, the Department’s risk assessment procedures identified 7 high-risk and 4 moderate-risk subrecipients, but it did not modify its monitoring activities to address the risks identified. Additional monitoring activities could include providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures like reviewing the subrecipient’s policies and procedures obtained to ensure the subrecipients complied with award terms, program requirements, and federal regulations. • Document monitoring procedures, results, and actions taken—For 4 of 4 WIOA subrecipients, 7 of 7 SLFRF subrecipients, 3 of 4 EFS subrecipients, and 1 of 2 SSP subrecipients we tested, while the Department completed and maintained a checklist of subrecipient monitoring procedures, it did not document monitoring results or Department actions taken for these subrecipients based on the checklist results. • Verify subrecipient single audits were conducted timely—The Department did not verify whether 1 of its 4 WIOA subrecipients had a single audit performed. Effect—The Department’s failure to perform required monitoring contributed to $347,345 of misspent EFS program monies that the Department may be required to return to the federal agency in accordance with federal requirements.1 Specifically, the Department’s not reviewing subrecipient procurement policies and procedures aided in allowing 1 EFS subrecipient to render services for which conflicts of interest existed. Specifically, the EFS subrecipient, Catholic Community Services (CCS), began having laundry services provided by a vendor, Amado Laundry, in April 2023, for which it then self-reported to the County a conflict-of-interest violation in May 2024. This violation was a result of a CCS employee forming a vendor relationship with Amado Laundry, which was owned by the employee’s mother. After the Department’s management was made aware of the conflict of interest, they performed monitoring procedures over CCS and identified noncompliance with federal procurement guidelines totaling $347,345, including determining that Amado Laundry charged a rate double the average rates charged by competitors. The County issued a management letter to CCS on September 27, 2024, communicating a conflict-of-interest finding and a procurement standards finding. The conflict-of-interest finding required CCS to develop new, written procurement-related conflict-of-interest procedures in compliance with federal regulations and to create and maintain an ongoing training program related to these federally compliant conflict-of-interest procedures for employees. Further, there is an increased risk that $29 million of program monies the Department awarded to subrecipients may not be spent in accordance with the award terms, program requirements, and federal regulations. If monies are spent inconsistent with program requirements, those who intended to benefit from the program may not receive all the services or other benefits they otherwise would have received. Also, the Department’s not verifying subrecipient single audits were conducted may result in the Department’s not following up on and ensuring corrective action is taken on audit findings that could potentially affect the program and/or issue management decisions for audit findings pertaining to the federal award. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The Department’s management reported that they did not always follow County policies and procedures and only performed limited procedures because their subrecipient monitoring policies and procedures were outdated, the number of subrecipients increased significantly during the fiscal year, and they did not have sufficient staff to monitor all subrecipients. The Department’s management also reported that it prioritized transitioning to a new enterprise resource planning (ERP) system rather than monitoring all subrecipients. Further, the County’s policies lacked requirements to perform monitoring activities based on risk assessments performed and to review subrecipients’ policies and procedures to ensure the subrecipients complied with award terms, program requirements, and federal regulations. Criteria—Federal regulation requires the County to monitor subrecipients, which includes required monitoring procedures for (2 CFR §200.332): • Assessing the risk of each subrecipient’s noncompliance and performing monitoring activities based on those risk assessments, such as providing training or technical assistance on program-related matters and performing on-site reviews, selective audits, and/or other monitoring procedures. • Reviewing financial and performance reports. • Verifying single audits were conducted timely. • Following up on and ensuring corrective action is taken on audit findings that could potentially affect the program. • Issuing a management decision for audit findings pertaining to the federal award. In addition, County policies require the County to: • Assess subrecipient risk and establish a monitoring plan and perform monitoring procedures at least every 2 years, including verification of internal controls.2,3 • Review the Federal Audit Clearinghouse at least quarterly to review subrecipient single audits and issue management decision letters, as necessary.2 • Maintain documentation of monitoring procedures, including the monitoring procedure’s results and any Department actions taken.3 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 to the County— 1. Perform required monitoring of its subrecipients and their compliance with the award terms, program requirements, and federal regulations. 2. Follow its established policies and procedures for performing and documenting monitoring reviews of subrecipients to: a. Maintain documentation of monitoring procedures demonstrating they were performed, including the monitoring procedures’ results and any Department actions taken, if appropriate. b. Verify subrecipients receive timely single audits, follow up on and ensure that corrective action is taken on audit findings that could potentially affect the program, and issue management decisions for audit findings pertaining to the federal award. 3. Update its policies and procedures to include: a. A process to determine the appropriate monitoring activities to perform based on subrecipient risk assessments performed, such as providing training or technical assistance on program-related matters, and performing on-site reviews, selective audits, and/or other monitoring procedures. b. Review subrecipients’ policies and procedures, including procurement processes, to ensure the subrecipients complied with award terms, program requirements, and federal regulations. 4. Prioritize and allocate sufficient resources, such as staffing, to comply with the award terms, program requirements, federal regulations, and its updated policies, and designate an individual(s) to perform necessary subrecipient-monitoring procedures. 5. Work with U.S. Department of Homeland Security to determine if it will require the Department to reimburse $347,345 in questioned costs. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022. 1 Federal Uniform Guidance requires federal awarding agencies to follow up on audit findings and issue a management decision to ensure the recipient takes appropriate and timely corrective action (2 CFR §200.513[c]). Further, it requires that federal awarding agencies’ management decisions clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action, as directed by the federal awarding agencies (2 CFR §200.521). 2 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-04: Subrecipient Risk Assessment / Management Decisions. 3 Pima County. (2018, June). Grants Management & Innovation Policy number GMI-28: Subrecipient Monitoring.
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 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 to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 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 to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 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 to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 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 to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.023 COVID-19 - Emergency Rental Assistance Program Award numbers and years: 1505-0270, May 5, 2021 through September 30, 2025; 23*019, May 5, 2021 through September 30, 2025; 23*056, May 5, 2021 through September 30, 2025; 23*064, May 5, 2021 through September 30, 2025 Assistance Listings number and name: 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award numbers and years: 1505-0271, March 3, 2021 through December 31, 2024; 19418, May 31, 2023 through September 30, 2023 Federal agency: U.S. Department of the Treasury Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation and guidance, for information it reported to the federal agency for its Emergency Rental Assistance (ERA) Program and Coronavirus State and Local Fiscal Recovery Funds (SLFRF) programs, the County’s Grants Management and Innovation Department (Department) did not retain documentation to support 8 reports we tested and did not always report accurate information or required elements. Specifically, we found that the Department: • Did not retain documentation for 4 ERA and 4 SLFRF reports—The Department did not retain documentation, like system reports, screenshots, or queries, to support the information it reported for 4 ERA and 4 SLFRF quarterly reports we tested.1 • Did not accurately report information for 4 SLFRF reports—The Department incorrectly reported information for the 4 SLFRF quarterly reports specified in the previous bullet. Specifically, the Department understated cumulative program expenditures by nearly $14.6 million, or 10% of total cumulative program expenditures, as of June 30, 2024. • Failed to report required elements for 2 ERA reports—The Department did not report all key performance and financial reporting data points required by the federal agency in 2 of 4 ERA quarterly reports we tested, thereby limiting the amount of data we could audit. Specifically, the Department did not submit: o Demographic information for the ERA2 – Q2 2023 report due August 16, 2023. o Any performance or financial reporting data for the ERA2 – Q3 2023 report due November 15, 2023. As of June 30, 2024, the County spent $77.6 million, or 99% of the nearly $77.7 million of ERA program monies, and $147.1 million, or 72% of the over $203.4 million of SLFRF program monies, advanced in fiscal year 2021. Effect—The Department’s failure to report required elements and accurate program information in its reports and to retain associated documentation for audit purposes resulted in us being unable to determine whether the reports were complete and accurate. Also, it results in the federal agency being unable to rely on the reports to monitor the Department’s program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program’s success. Further, the Department is unable to resubmit reports because the federal agency does not allow grantees to revise reports after the reporting period has closed.2,4 Finally, the Department is at risk that this finding applies to other federal programs it administers. Cause—As described in finding 2024-103, the Department did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses. Department management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation because the Department did not have a formal policy requiring a documented review and approval of its reports. Further, the Department did not have a process to track when each report was required to be completed and did not verify that reports were submitted by the designated due dates. Additionally, Department management reported that it had significant staff turnover between fiscal years, resulting in current staff being unaware of how past reports were prepared and what supporting documentation was used. Further, Department management reported that there were many challenges in using the U.S. Department of the Treasury’s portal, including the inability to make changes to submitted reports after the reporting period ended. Criteria—Federal agency guidance requires the Department to report accurate and complete information for the ERA and SLFRF quarterly reports.3,4 Also, federal regulation and Department retention policies require the Department to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report (2 CFR §200.334).5 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 to the Department— 1. Prepare and retain detailed documentation, such as system reports, screenshots, or queries, to ensure accurate and complete program information is reported to the federal agency for each federal program. 2. Follow its retention policies and procedures and federal regulation requirements to retain all records relating to a federal award for a period of 3 years from the date of its submission of the final expenditure report. 3. Develop, document, and implement policies and procedures and train responsible employees to monitor compliance with the program’s reporting requirements, including processes to: a. Reconcile expenditure amounts reported to the County’s accounting records and investigate and resolve any differences prior to submitting the reports to the federal agencies. b. Perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. c. Create a tracking mechanism to ensure reports are completed and submitted by the designated due dates. 4. Work with the U.S. Department of the Treasury to determine if it will require and allow the Department to adjust and resubmit previously submitted reports to correct detected errors and/or missing information. The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 The Department did not retain documentation for the following ERA quarterly reports: ERA2 - Q2 2023, Q3 2023, Q4 2023, and Q1 2024. Further, the Department did not retain documentation for the following SLFRF quarterly Project and Expenditure Reports: April 1, 2023 through June 30, 2023; July 1, 2023 through September 30, 2023; October 1, 2023 through December 31, 2023; and January 1, 2024 through March 31, 2024. 2 On April 2, 2024, the U.S. Department of the Treasury updated its ERA2 Treasury Portal User Guide, which indicates that the grantee can only resubmit a report before the reporting deadline. (U.S. Department of the Treasury. [2024, April]. Emergency Rental Assistance Program [ERA2] Treasury Portal User Guide, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Portal-Users-Guide.pdf). 3 The U.S. Department of the Treasury requires the Department to submit accurate and complete ERA quarterly reports of cumulative programmatic and financial information covering the period from receipt of awards to the end of the current quarterly reporting period (U.S. Department of the Treasury. [2024, September]. Emergency Rental Assistance Program [ERA2] Reporting Guidance, Version 3.0. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 4 On April 7, 2023, the U.S. Department of the Treasury updated its Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, which indicates that the grantee can only resubmit a report before the reporting deadline. Further, the U.S. Department of the Treasury requires the Department to submit accurate and complete SLFRF quarterly project and expenditure reports that provide information on projects funded, expenditures, and contracts and subawards greater than or equal to $50,000, and other information required from recipients. (U.S. Department of the Treasury. [2023, April]. Project and Expenditure Report User Guide State and Local Fiscal Recovery Funds, Version 2. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/ERA2-Reporting-Guidance.pdf). 5 Pima County’s record retention schedule requires federal grant records to be retained after quarterly, annual, or final expenditure reports are submitted and approved or after funding agency requirements are met, whichever is longer (Pima County. [2023, December]. Pima County Record Retention Schedule).
Assistance Listings number and name: 21.032 COVID-19 - Local and Tribal Consistency Fund Award number and year: 1505-0276, October 20, 2022 through March 31, 2023 Federal agency: U.S. Department of the Treasury Assistance Listings number and name: 97.141 Shelter and Services Program Award number and year: 24*039, March 1, 2023 through September 30, 2025 Federal agency: U.S. Department of Homeland Security Compliance requirement: Reporting Questioned costs: Not applicable Condition—Contrary to federal regulation, the County’s Grants Management and Innovation Department (Department) did not develop, document, or implement internal control procedures to monitor compliance with the programs’ reporting requirements. Specifically, for 5 of 7 federal program reports we tested, the Department did not perform an independent review and approval of reports prior to submitting them to the federal grantor to ensure the reported expenditures were accurate, agreed to the County’s records, and contained only allowable expenses, as follows: • 1 annual obligation and expenditure report for the Local and Tribal Consistency Fund (LTCF) totaling $7,924,031. • 3 quarterly financial reports and 3 quarterly performance reports for the Shelter and Services Program (SSP) totaling $3,092,423. Despite lacking internal control procedures, we did not identify inaccurate program information reported to the federal agency. Effect—Without effective internal control procedures in place, there is an increased risk that the Department may not prevent or detect and correct errors on reports it submits to federal agencies, which rely on them to effectively monitor the program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the programs’ success. Further, the Department is at risk that this finding applies to other federal programs it administers. For instance, in finding 2024-104, we found errors in its reports for the Emergency Rental Assistance Program and Coronavirus State and Local Fiscal Recovery Funds federal programs the Department also administers. Cause—The Department’s management reported that it had performed independent reviews and approvals of all reports but did not maintain documentation of these independent reviews because the Department did not have a formal policy requiring a documented review and approval of its reports. Criteria—Federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). This would include developing, documenting, and implementing internal control procedures to monitor compliance with federal agency guidelines requiring the Department to report accurate and complete information for the LTCF annual obligation and expenditure report and SSP quarterly financial and performance reports.1,2 Recommendations to the Department—The Department should develop, document, and implement policies and procedures, and train responsible employees, to monitor compliance with the programs’ reporting requirements, including processes to perform and document an independent review and approval of all federal program reports before submitting them to the federal agency to ensure reports are accurate, agree to County records, and contain only allowable expenditures. The County's corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 U.S. Department of the Treasury. [2022, September]. Reporting Guidance for the Local Assistance and Tribal Consistency Fund. Retrieved 4/7/2025 from https://home.treasury.gov/system/files/136/LATCF-Reporting-Guidance.pdf. 2 U.S. Department of Homeland Security. [2023, June]. The Department of Homeland Security (DHS) Notice of Funding Opportunity (NOFO) Fiscal Year 2023 Shelter and Services Program.