2024-018 Improve Controls over Federal Direct Student Loan Reconciliations Compliance Requirement: Cash Management Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Number and Title: 84.268 – Federal Direct Student Loans Federal Award Number: P268K241311 (Year: 2024) Questioned Costs: None Identified Description: Augusta University did not perform required monthly reconciliations for the Federal Direct Student Loans program appropriately. Background Information: Under the Federal Direct Student Loan program, Augusta University (University) makes Direct Subsidized Loans and Direct Unsubsidized Loans to eligible students, and Direct PLUS Loans to eligible graduate or professional students or to eligible parents of eligible dependent undergraduate students, to pay for the cost of attendance. The student’s Individual Student Information Record (ISIR), along with other information, is used by the University to originate the student’s Direct Loan. During the current fiscal year, the University originated and disbursed $104,537,405 in Federal Direct Student Loans to 4,990 students. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 34 CFR Section 685.300(b) state that upon entering into a written program participation agreement associated with Federal Direct Student Loans “the school must promise to comply with the [Higher Education] Act [of 1965] and applicable regulations and must agree to … on a monthly basis, reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary.” Condition: A sample of four periodic Federal Direct Student Loan program reconciliations was randomly selected for testing using a non-statistical sampling method. The reconciliations were reviewed to ensure that the School Account Statement (SAS) data files provided by the U.S. Department of Education’s Common Origination and Disbursement (COD) system were reconciled appropriately to the student information system and the University’s financial records and that variances were resolved in a timely manner. While reconciliations of the Direct Loans disbursed per the student information system and the University’s financial records and reconciliations of the cash drawdowns per the COD system and the University’s financial records were performed throughout the year, testing revealed that reconciliations of the SAS data files by student were not performed for the months tested. Cause: In discussing these deficiencies with management, they stated that the failure to perform the necessary reconciliations at the student level was due to staffing changes and a lack of continuity in the Student Financial Aid Department. Effect: The University is not in compliance with their program participation agreement or federal regulations concerning Federal Direct Student Loans. In addition, omissions and errors in information submitted to the COD system or within the student information system may not be identified and corrected in a timely manner. Furthermore, if all SAS data is not reconciled appropriately, the University cannot close out the Direct Loan account in the COD system at the end of the award year. Recommendation: The University should establish procedures and assign responsibility for the monthly and yearly reconciliation of the Federal Direct Student Loan program activity to ensure that the guidelines contained in the Direct Loan School Guide and Federal Student Aid Handbook are followed. The University’s Financial Aid and Business Offices should maintain their internal records in such a way that they can prepare the monthly reconciliations accurately and timely. Additionally, management should develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2024-019 Strengthen Controls over Unofficial Withdrawals Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) 84.408 – Postsecondary Education Scholarships for Veteran’s Dependents Federal Award Numbers: P007A231020 (Year: 2024), P063P231311 (Year: 2024), P268K241311 (Year: 2024), P379T241311 (Year: 2024), P408A231311 (Year: 2024) Questioned Costs: $2,189 Description: Augusta University did not properly identify and return unearned Title IV funds for students who unofficially withdrew from classes. Background Information: Student financial assistance, or Title IV, funds are awarded by Augusta University (University) to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. An unofficial withdrawal is one in which the University has not received notice from the student that the student has ceased or will cease attending the school. Schools must have a procedure in place to determine when a student who began attendance and received or could have received an initial disbursement of Title IV funds officially withdrew. For these unofficial withdrawals, the University must also determine a withdrawal date, which may be the midpoint of the period of enrollment or the last date of an academically related activity in which the student participated. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The University is required to determine the amount of Title IV funds that the student earned as of the student’s withdrawal date when a recipient of Title IV funds withdraws from the University during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state “(1) An institution must return the amount of title IV funds for which it is responsible… as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew… (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the – (i) Payment period or period of enrollment… (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.” Condition: A sample of ten students from a population of 100 students who received student financial assistance (SFA) for the Fall 2023 and Spring 2024 semesters and withdrew from the University but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that R2T4 calculations were not performed appropriately for one student who unofficially withdrew during the Fall 2023 semester and one student who unofficially withdrew during the Spring 2024 semester. These students should have been required to return a total of $2,189 to various SFA programs. Questioned Costs: Upon testing a sample of $54,216 in financial aid disbursements to students who withdrew from the University but for whom no R2T4 was performed, known questioned costs of $2,189 were identified for omitted R2T4 calculations. Using the total population amount of $622,973, we project the likely questioned costs to be approximately $25,155. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that misclassification of the withdrawal types occurred due to inadequate training for processing both official and unofficial withdrawals. Effect: The University is not in compliance with the federal regulations concerning performing R2T4 procedures. This deficiency may expose the University to unnecessary financial strains and shortages. Unearned Title IV funds must be returned to the U.S. Department of Education (ED). Though the University collection efforts could be unsuccessful as the students may no longer attend the University and/or fail to repay the funds. Additionally, failing to identify withdrawn students, not performing R2T4 calculations, and/or not returning unearned Title IV funds to ED in a timely manner may result in adverse actions and impact the University’s participation in Title IV programs. Recommendation: The University should follow established policies and procedures to ensure that students who unofficially withdrew and received Title IV funds are identified and the required R2T4 calculations are performed. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The University should contact ED regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2024-022 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans Federal Award Numbers: P007A237757 (Year: 2024), P033A237757 (Year: 2024), P063P232783 (Year: 2024), P268K242783 (Year: 2024) Questioned Costs: $3,998 Description: The Central Georgia Technical College Student Financial Aid Office improperly awarded Student Financial Assistance amounts to ineligible students. Background Information: To receive student financial assistance (SFA), students must complete a Free Application for Federal Student Aid (FAFSA). Once the FAFSA is processed, an Institutional Student Information Record (ISIR) is provided to Central Georgia Technical College (Technical College). Among other things, the ISIR contains the applicant’s Expected Family Contribution (EFC) and helps determine student eligibility, award amounts, and disbursements. The following types of SFA was awarded and disbursed to students at the Technical College: • Federal Pell Grant (Pell) – The Pell program provides grants to eligible students enrolled in eligible undergraduate programs and certain eligible post-baccalaureate teacher certificate programs and is intended to provide the foundation of financial aid. Maximum and minimum Pell awards are established by statute, but the amount for which each student is eligible is based on Pell Grant Payment and Disbursement Schedules published every year by the U.S. Department of Education (ED). • Federal Supplemental Educational Opportunity Grants (FSEOG) – The FSEOG program provides grants to eligible undergraduate students. Priority for FSEOG awards is given to Pell recipients who have the lowest EFC. • Federal Work-Study (FWS) – The FWS program provides part-time employment to eligible undergraduate and graduate students who need earnings to help meet the costs of postsecondary education. • Federal Direct Student Loans – The Direct Loan Program makes Direct Subsidized Loans and Direct Unsubsidized Loans to eligible students, and Direct PLUS Loans to eligible graduate or professional students or to eligible parents of eligible dependent undergraduate students, to pay for the cost of attending postsecondary educational institutions. Each student’s ISIR, along with other information, is used by the Institution to originate the student’s Direct Loan. Once financial aid is awarded and disbursed to students, those students are required to maintain satisfactory academic progress (SAP) as defined by the Technical College’s published standards. These published standards must include a review of a qualitative component, which is typically based upon grade point average (GPA), and a quantitative component, which is based upon successful completion of attempted coursework at a specified pace within a maximum timeframe. SAP must be evaluated at least once per academic year, and if at the time of each evaluation, the student has not maintained SAP, they are no longer eligible to receive SFA. Criteria: As a recipient of federal awards, the Technical College is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. All ED SFA programs are authorized by Title IV of the Higher Education Act (HEA) of 1965, as amended (20 USC 1001 et seq.). In addition, provisions included in Title 34 CFR Section 668 provide general provisions for administering SFA programs and Title 34 CFR Sections 675, 676, 685, and 690 provide eligibility and other related program requirements that are specific to the FWS Program, FSEOG Program, Federal Direct Student Loans Program, and Federal Pell Grant Program, respectively. Condition: A sample of 40 students from a population of 4,938 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. Auditors noted that two students were not in compliance with the Technical College’s published Satisfactory Academic Progress (SAP) policies as follows: • One student did not meet the qualitative requirement of SAP and was placed on Warning status instead of Suspension status. Because the student did not return for the subsequent semester, this deficiency did not result in the over disbursement of funds. • One student did not meet the quantitative requirement of SAP, which resulted in over disbursements totaling $3,998. Questioned Costs: Upon testing a sample of $137,191 in financial aid disbursements, known questioned costs of $3,998 were identified for the students who received student financial assistance in excess of their eligibility. Using the total population amount of $27,605,503, we project the likely questioned costs to be approximately $804,476. The following assistance listing numbers were affected by the known and likely questioned costs: 84.007 and 84.063. Cause: In discussing these deficiencies with management, they stated that the timing of SAP processing in the student information system led to the incorrect SAP assessments for those students who had a significant break in enrollment and those who registered for classes later than usual. Effect: This deficiency may expose the Technical College to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to ED. Though the Technical College may attempt to collect the funds from individual students affected by the error, these collection efforts could be unsuccessful as the students may no longer attend the Technical College and/or fail to repay the funds. Additionally, the Technical College was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The Technical College should review its processes and procedures for determining each student’s financial aid eligibility. Where vulnerable, the Technical College should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the Technical College should develop and implement a monitoring process to ensure that controls are functioning properly. The Technical College should also contact ED regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2024-015 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) Federal Award Numbers: P007A231006 (Year: 2024), P033A231006 (Year: 2024), P063P230086 (Year: 2024), P268K240086 (Year: 2024), P379T240086 (Year: 2024) Questioned Costs: $376 Description: The Georgia State University Student Financial Aid Office improperly determined the Student Financial Assistance award amounts for eligible students. Background Information: To receive student financial assistance (SFA), students must complete a Free Application for Federal Student Aid (FAFSA). Once the FAFSA is processed, an Institutional Student Information Record (ISIR) is provided to Georgia State University (University). Among other things, the ISIR contains the applicant’s Expected Family Contribution (EFC) and helps determine student eligibility, award amounts, and disbursements. The following types of SFA was awarded and disbursed to students at the University: • Federal Pell Grant (Pell) – The Pell program provides grants to eligible students enrolled in eligible undergraduate programs and certain eligible post-baccalaureate teacher certificate programs and is intended to provide the foundation of financial aid. Maximum and minimum Pell awards are established by statute, but the amount for which each student is eligible is based on Pell Grant Payment and Disbursement Schedules published every year by the U.S. Department of Education (ED). • Federal Supplemental Educational Opportunity Grants (FSEOG) – The FSEOG program provides grants to eligible undergraduate students. Priority for FSEOG awards is given to Pell recipients who have the lowest EFC. • Federal Work-Study (FWS) – The FWS program provides part-time employment to eligible undergraduate and graduate students who need earnings to help meet the costs of postsecondary education. • Federal Direct Student Loans – The Direct Loan Program makes Direct Subsidized Loans and Direct Unsubsidized Loans to eligible students, and Direct PLUS Loans to eligible graduate or professional students or to eligible parents of eligible dependent undergraduate students, to pay for the cost of attending postsecondary educational institutions. Each student’s ISIR, along with other information, is used by the University to originate the student’s Direct Loan. • Teacher Education Assistance for College and Higher Education (TEACH) Grants – The TEACH Grants program is a non-need-based grant for students who are enrolled in an eligible program of study, and who agree to serve as a full-time teacher, in a high-need field, in an elementary school, secondary school, or educational service agency serving low-income students for at least four years within eight years of completing the program for which the TEACH Grant was awarded. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. All ED SFA programs are authorized by Title IV of the Higher Education Act (HEA) of 1965, as amended (20 USC 1001 et seq.). The U.S. Department of Health and Human Services (HHS) SFA programs are authorized by the Public Health Service Act (PHS Act), which was amended by the Health Professions Education Partnership Act of 1998, Pub. L. No. 105-395 and, for the NFLP, further amended by the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act), Pub. L. No. 111-148, Section 5311. In addition, provisions included in Title 34 CFR Section 668 provide general provisions for administering SFA programs and Title 34 CFR Sections 675, 676, 685, 686, and 690 provide eligibility and other related program requirements that are specific to the FWS Program, FSEOG Program, Federal Direct Student Loans Program, TEACH Grants, and Federal Pell Grant Program, respectively. Condition: A sample of 25 students from a population of 33,083 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiency was identified: • One student received $376 more in Federal Pell Grant Program funds than they were eligible to receive based upon their enrollment status and EFC. This resulted in an over disbursement of $376. Questioned Costs: Upon testing a sample of $213,145 in financial aid disbursements, known questioned costs of $376 were identified for the student who received student financial assistance in excess of their eligibility. Using the total population amount of $306,086,436, we project the likely questioned costs to be approximately $539,954. The following assistance listing number was affected by the known and likely questioned costs: 84.063. Cause: In discussing this deficiency with management, they stated that a change to the student’s ISIR after the term had ended resulted in the student being selected for verification. The student information was not configured to automatically adjust the student’s Pell award based upon the results of verification procedures performed and caused the student to receive aid in excess of their amended eligibility. Effect: This deficiency may expose the University to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to ED. Though the University may attempt to collect the funds from individual students affected by the error, these collection efforts could be unsuccessful as the students may no longer attend the University and/or fail to repay the funds. Additionally, the University was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The University should review its processes and procedures for determining each student’s financial aid eligibility. Where vulnerable, the University should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the University should develop and implement a monitoring process to ensure that controls are functioning properly. The University should also contact ED regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2024-016 Strengthen Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) Federal Award Numbers: P007A231006 (Year: 2024), P033A231006 (Year: 2024), P063P230086 (Year: 2024), P268K240086 (Year: 2024), P379T240086 (Year: 2024) Questioned Costs: None Identified Description: Georgia State University did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Background Information: Student financial assistance (SFA), or Title IV, funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws from Georgia State University (University), the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. The R2T4 calculation is prepared using the following information associated with the period of enrollment: • The student’s Title IV aid information, including amounts disbursed and amounts that could have been disbursed, • The withdrawal date and scheduled start date, end date, and break days, and • Institutional charges, including tuition, fees, housing, food, books, supplies, materials, and equipment. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The University is required to determine the amount of Title IV funds that the student earned as of the student’s withdrawal date when a recipient of Title IV funds withdraws from the University during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state “(1) An institution must return the amount of title IV funds for which it is responsible… as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew… (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the – (i) Payment period or period of enrollment… (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.” Condition: A sample of 25 students from a population of 3,325 students who received student financial assistance (SFA) and withdrew from the University during the Fall 2023 and Spring 2024 semesters was randomly selected for testing using a non-statistical sampling method. The students’ R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agencies and/or student in a timely manner. The following deficiency was noted: • Funds were not returned to the appropriate grantor programs within the required time frame for five of the withdrawn students tested. Cause: In discussing these deficiencies with management, they stated that staff turnover led to the return of funds in an untimely manner. Effect: The University is not in compliance with the federal regulations concerning performing R2T4 procedures. Returning unearned Title IV funds to ED in an untimely manner may result in adverse actions and impact the University’s participation in Title IV programs. Recommendation: The University should follow established procedures to ensure that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2024-019 Strengthen Controls over Unofficial Withdrawals Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) 84.408 – Postsecondary Education Scholarships for Veteran’s Dependents Federal Award Numbers: P007A231020 (Year: 2024), P063P231311 (Year: 2024), P268K241311 (Year: 2024), P379T241311 (Year: 2024), P408A231311 (Year: 2024) Questioned Costs: $2,189 Description: Augusta University did not properly identify and return unearned Title IV funds for students who unofficially withdrew from classes. Background Information: Student financial assistance, or Title IV, funds are awarded by Augusta University (University) to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. An unofficial withdrawal is one in which the University has not received notice from the student that the student has ceased or will cease attending the school. Schools must have a procedure in place to determine when a student who began attendance and received or could have received an initial disbursement of Title IV funds officially withdrew. For these unofficial withdrawals, the University must also determine a withdrawal date, which may be the midpoint of the period of enrollment or the last date of an academically related activity in which the student participated. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The University is required to determine the amount of Title IV funds that the student earned as of the student’s withdrawal date when a recipient of Title IV funds withdraws from the University during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state “(1) An institution must return the amount of title IV funds for which it is responsible… as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew… (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the – (i) Payment period or period of enrollment… (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.” Condition: A sample of ten students from a population of 100 students who received student financial assistance (SFA) for the Fall 2023 and Spring 2024 semesters and withdrew from the University but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that R2T4 calculations were not performed appropriately for one student who unofficially withdrew during the Fall 2023 semester and one student who unofficially withdrew during the Spring 2024 semester. These students should have been required to return a total of $2,189 to various SFA programs. Questioned Costs: Upon testing a sample of $54,216 in financial aid disbursements to students who withdrew from the University but for whom no R2T4 was performed, known questioned costs of $2,189 were identified for omitted R2T4 calculations. Using the total population amount of $622,973, we project the likely questioned costs to be approximately $25,155. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that misclassification of the withdrawal types occurred due to inadequate training for processing both official and unofficial withdrawals. Effect: The University is not in compliance with the federal regulations concerning performing R2T4 procedures. This deficiency may expose the University to unnecessary financial strains and shortages. Unearned Title IV funds must be returned to the U.S. Department of Education (ED). Though the University collection efforts could be unsuccessful as the students may no longer attend the University and/or fail to repay the funds. Additionally, failing to identify withdrawn students, not performing R2T4 calculations, and/or not returning unearned Title IV funds to ED in a timely manner may result in adverse actions and impact the University’s participation in Title IV programs. Recommendation: The University should follow established policies and procedures to ensure that students who unofficially withdrew and received Title IV funds are identified and the required R2T4 calculations are performed. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The University should contact ED regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2024-015 Improve Controls over the Awarding Process Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) Federal Award Numbers: P007A231006 (Year: 2024), P033A231006 (Year: 2024), P063P230086 (Year: 2024), P268K240086 (Year: 2024), P379T240086 (Year: 2024) Questioned Costs: $376 Description: The Georgia State University Student Financial Aid Office improperly determined the Student Financial Assistance award amounts for eligible students. Background Information: To receive student financial assistance (SFA), students must complete a Free Application for Federal Student Aid (FAFSA). Once the FAFSA is processed, an Institutional Student Information Record (ISIR) is provided to Georgia State University (University). Among other things, the ISIR contains the applicant’s Expected Family Contribution (EFC) and helps determine student eligibility, award amounts, and disbursements. The following types of SFA was awarded and disbursed to students at the University: • Federal Pell Grant (Pell) – The Pell program provides grants to eligible students enrolled in eligible undergraduate programs and certain eligible post-baccalaureate teacher certificate programs and is intended to provide the foundation of financial aid. Maximum and minimum Pell awards are established by statute, but the amount for which each student is eligible is based on Pell Grant Payment and Disbursement Schedules published every year by the U.S. Department of Education (ED). • Federal Supplemental Educational Opportunity Grants (FSEOG) – The FSEOG program provides grants to eligible undergraduate students. Priority for FSEOG awards is given to Pell recipients who have the lowest EFC. • Federal Work-Study (FWS) – The FWS program provides part-time employment to eligible undergraduate and graduate students who need earnings to help meet the costs of postsecondary education. • Federal Direct Student Loans – The Direct Loan Program makes Direct Subsidized Loans and Direct Unsubsidized Loans to eligible students, and Direct PLUS Loans to eligible graduate or professional students or to eligible parents of eligible dependent undergraduate students, to pay for the cost of attending postsecondary educational institutions. Each student’s ISIR, along with other information, is used by the University to originate the student’s Direct Loan. • Teacher Education Assistance for College and Higher Education (TEACH) Grants – The TEACH Grants program is a non-need-based grant for students who are enrolled in an eligible program of study, and who agree to serve as a full-time teacher, in a high-need field, in an elementary school, secondary school, or educational service agency serving low-income students for at least four years within eight years of completing the program for which the TEACH Grant was awarded. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. All ED SFA programs are authorized by Title IV of the Higher Education Act (HEA) of 1965, as amended (20 USC 1001 et seq.). The U.S. Department of Health and Human Services (HHS) SFA programs are authorized by the Public Health Service Act (PHS Act), which was amended by the Health Professions Education Partnership Act of 1998, Pub. L. No. 105-395 and, for the NFLP, further amended by the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act), Pub. L. No. 111-148, Section 5311. In addition, provisions included in Title 34 CFR Section 668 provide general provisions for administering SFA programs and Title 34 CFR Sections 675, 676, 685, 686, and 690 provide eligibility and other related program requirements that are specific to the FWS Program, FSEOG Program, Federal Direct Student Loans Program, TEACH Grants, and Federal Pell Grant Program, respectively. Condition: A sample of 25 students from a population of 33,083 students who received student financial assistance funds was randomly selected for testing using a non-statistical sampling method. Student financial assistance files were reviewed to ensure that financial assistance was properly calculated and disbursed to eligible students. The following deficiency was identified: • One student received $376 more in Federal Pell Grant Program funds than they were eligible to receive based upon their enrollment status and EFC. This resulted in an over disbursement of $376. Questioned Costs: Upon testing a sample of $213,145 in financial aid disbursements, known questioned costs of $376 were identified for the student who received student financial assistance in excess of their eligibility. Using the total population amount of $306,086,436, we project the likely questioned costs to be approximately $539,954. The following assistance listing number was affected by the known and likely questioned costs: 84.063. Cause: In discussing this deficiency with management, they stated that a change to the student’s ISIR after the term had ended resulted in the student being selected for verification. The student information was not configured to automatically adjust the student’s Pell award based upon the results of verification procedures performed and caused the student to receive aid in excess of their amended eligibility. Effect: This deficiency may expose the University to unnecessary financial strains and shortages. The funds disbursed to students in excess of their eligibility must be returned to ED. Though the University may attempt to collect the funds from individual students affected by the error, these collection efforts could be unsuccessful as the students may no longer attend the University and/or fail to repay the funds. Additionally, the University was not in compliance with federal regulations concerning awarding of SFA funds to students. Recommendation: The University should review its processes and procedures for determining each student’s financial aid eligibility. Where vulnerable, the University should develop and/or modify its policies and procedures to ensure that correct amounts will be awarded to students in conformity with federal requirements. Additionally, the University should develop and implement a monitoring process to ensure that controls are functioning properly. The University should also contact ED regarding resolution of this finding. Views of Responsible Officials: We concur with this finding.
2024-016 Strengthen Controls over the Return of Title IV Funds Process Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.033 – Federal Work Study Program 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) Federal Award Numbers: P007A231006 (Year: 2024), P033A231006 (Year: 2024), P063P230086 (Year: 2024), P268K240086 (Year: 2024), P379T240086 (Year: 2024) Questioned Costs: None Identified Description: Georgia State University did not properly perform the Return of Title IV funds process to ensure that unearned Title IV funds were returned in a timely manner. Background Information: Student financial assistance (SFA), or Title IV, funds are awarded to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws from Georgia State University (University), the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. The R2T4 calculation is prepared using the following information associated with the period of enrollment: • The student’s Title IV aid information, including amounts disbursed and amounts that could have been disbursed, • The withdrawal date and scheduled start date, end date, and break days, and • Institutional charges, including tuition, fees, housing, food, books, supplies, materials, and equipment. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The University is required to determine the amount of Title IV funds that the student earned as of the student’s withdrawal date when a recipient of Title IV funds withdraws from the University during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state “(1) An institution must return the amount of title IV funds for which it is responsible… as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew… (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the – (i) Payment period or period of enrollment… (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.” Condition: A sample of 25 students from a population of 3,325 students who received student financial assistance (SFA) and withdrew from the University during the Fall 2023 and Spring 2024 semesters was randomly selected for testing using a non-statistical sampling method. The students’ R2T4 calculations were reviewed to ensure that the refunds were calculated and returned in the correct amount to the proper funding agencies and/or student in a timely manner. The following deficiency was noted: • Funds were not returned to the appropriate grantor programs within the required time frame for five of the withdrawn students tested. Cause: In discussing these deficiencies with management, they stated that staff turnover led to the return of funds in an untimely manner. Effect: The University is not in compliance with the federal regulations concerning performing R2T4 procedures. Returning unearned Title IV funds to ED in an untimely manner may result in adverse actions and impact the University’s participation in Title IV programs. Recommendation: The University should follow established procedures to ensure that unearned funds are returned to the appropriate accounts in a timely manner in accordance with federal regulations. Management should also develop and implement a monitoring process to ensure that controls are operating properly. Views of Responsible Officials: We concur with this finding.
2024-019 Strengthen Controls over Unofficial Withdrawals Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) 84.408 – Postsecondary Education Scholarships for Veteran’s Dependents Federal Award Numbers: P007A231020 (Year: 2024), P063P231311 (Year: 2024), P268K241311 (Year: 2024), P379T241311 (Year: 2024), P408A231311 (Year: 2024) Questioned Costs: $2,189 Description: Augusta University did not properly identify and return unearned Title IV funds for students who unofficially withdrew from classes. Background Information: Student financial assistance, or Title IV, funds are awarded by Augusta University (University) to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. An unofficial withdrawal is one in which the University has not received notice from the student that the student has ceased or will cease attending the school. Schools must have a procedure in place to determine when a student who began attendance and received or could have received an initial disbursement of Title IV funds officially withdrew. For these unofficial withdrawals, the University must also determine a withdrawal date, which may be the midpoint of the period of enrollment or the last date of an academically related activity in which the student participated. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The University is required to determine the amount of Title IV funds that the student earned as of the student’s withdrawal date when a recipient of Title IV funds withdraws from the University during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state “(1) An institution must return the amount of title IV funds for which it is responsible… as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew… (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the – (i) Payment period or period of enrollment… (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.” Condition: A sample of ten students from a population of 100 students who received student financial assistance (SFA) for the Fall 2023 and Spring 2024 semesters and withdrew from the University but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that R2T4 calculations were not performed appropriately for one student who unofficially withdrew during the Fall 2023 semester and one student who unofficially withdrew during the Spring 2024 semester. These students should have been required to return a total of $2,189 to various SFA programs. Questioned Costs: Upon testing a sample of $54,216 in financial aid disbursements to students who withdrew from the University but for whom no R2T4 was performed, known questioned costs of $2,189 were identified for omitted R2T4 calculations. Using the total population amount of $622,973, we project the likely questioned costs to be approximately $25,155. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that misclassification of the withdrawal types occurred due to inadequate training for processing both official and unofficial withdrawals. Effect: The University is not in compliance with the federal regulations concerning performing R2T4 procedures. This deficiency may expose the University to unnecessary financial strains and shortages. Unearned Title IV funds must be returned to the U.S. Department of Education (ED). Though the University collection efforts could be unsuccessful as the students may no longer attend the University and/or fail to repay the funds. Additionally, failing to identify withdrawn students, not performing R2T4 calculations, and/or not returning unearned Title IV funds to ED in a timely manner may result in adverse actions and impact the University’s participation in Title IV programs. Recommendation: The University should follow established policies and procedures to ensure that students who unofficially withdrew and received Title IV funds are identified and the required R2T4 calculations are performed. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The University should contact ED regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2024-019 Strengthen Controls over Unofficial Withdrawals Compliance Requirement: Special Tests and Provisions Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: None AL Numbers and Titles: 84.007 – Federal Supplemental Educational Opportunity Grants 84.063 – Federal Pell Grant Program 84.268 – Federal Direct Student Loans 84.379 – Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) 84.408 – Postsecondary Education Scholarships for Veteran’s Dependents Federal Award Numbers: P007A231020 (Year: 2024), P063P231311 (Year: 2024), P268K241311 (Year: 2024), P379T241311 (Year: 2024), P408A231311 (Year: 2024) Questioned Costs: $2,189 Description: Augusta University did not properly identify and return unearned Title IV funds for students who unofficially withdrew from classes. Background Information: Student financial assistance, or Title IV, funds are awarded by Augusta University (University) to a student under the assumption that the student will attend school for the entire period for which the assistance is awarded. When a student withdraws, the student may no longer be eligible for the full amount of Title IV funds that the student was originally scheduled to receive. If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the school must perform a Return of Title IV (R2T4) calculation to determine the amount of Title IV assistance earned by the student. Up through the 60% point in each period of enrollment, a pro rata schedule is used to determine the amount of Title IV funds the student has earned at the time of withdrawal. After the 60% point in the period of enrollment, a student is considered to have earned 100% of the Title IV funds the student was scheduled to receive during the period. An unofficial withdrawal is one in which the University has not received notice from the student that the student has ceased or will cease attending the school. Schools must have a procedure in place to determine when a student who began attendance and received or could have received an initial disbursement of Title IV funds officially withdrew. For these unofficial withdrawals, the University must also determine a withdrawal date, which may be the midpoint of the period of enrollment or the last date of an academically related activity in which the student participated. Criteria: As a recipient of federal awards, the University is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in Title 34 CFR Section 668.22 provide requirements over the treatment of Title IV funds when a student withdraws. The University is required to determine the amount of Title IV funds that the student earned as of the student’s withdrawal date when a recipient of Title IV funds withdraws from the University during a payment period or period of enrollment in which the recipient began attendance. A refund must be returned to Title IV programs when the total amount of the Title IV grant or loan assistance, or both, that the student earned is less than the amount of the Title IV grant and/or loan assistance that was disbursed to the student as of the withdrawal date. Additionally, provisions included in Title 34 CFR Section 668.22(j) address the timeframe for the return of title IV funds and state “(1) An institution must return the amount of title IV funds for which it is responsible… as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew… (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the – (i) Payment period or period of enrollment… (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew.” Condition: A sample of ten students from a population of 100 students who received student financial assistance (SFA) for the Fall 2023 and Spring 2024 semesters and withdrew from the University but for whom no R2T4 calculation was performed was randomly selected for testing using a non-statistical sampling method. Attendance and withdrawal records were reviewed to determine if a refund should have been calculated for these students. Our examination revealed that R2T4 calculations were not performed appropriately for one student who unofficially withdrew during the Fall 2023 semester and one student who unofficially withdrew during the Spring 2024 semester. These students should have been required to return a total of $2,189 to various SFA programs. Questioned Costs: Upon testing a sample of $54,216 in financial aid disbursements to students who withdrew from the University but for whom no R2T4 was performed, known questioned costs of $2,189 were identified for omitted R2T4 calculations. Using the total population amount of $622,973, we project the likely questioned costs to be approximately $25,155. The following assistance listing numbers were affected by the known and likely questioned costs: 84.063 and 84.268. Cause: In discussing these deficiencies with management, they stated that misclassification of the withdrawal types occurred due to inadequate training for processing both official and unofficial withdrawals. Effect: The University is not in compliance with the federal regulations concerning performing R2T4 procedures. This deficiency may expose the University to unnecessary financial strains and shortages. Unearned Title IV funds must be returned to the U.S. Department of Education (ED). Though the University collection efforts could be unsuccessful as the students may no longer attend the University and/or fail to repay the funds. Additionally, failing to identify withdrawn students, not performing R2T4 calculations, and/or not returning unearned Title IV funds to ED in a timely manner may result in adverse actions and impact the University’s participation in Title IV programs. Recommendation: The University should follow established policies and procedures to ensure that students who unofficially withdrew and received Title IV funds are identified and the required R2T4 calculations are performed. Management should also develop and implement a monitoring process to ensure that controls are operating properly. The University should contact ED regarding resolution of the finding, as well. Views of Responsible Officials: We concur with this finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-026 Improve Controls over Special Reporting Compliance Requirement: Reporting Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.568 – Low-Income Home Energy Assistance Program 93.568 – COVID-19 – Low-Income Home Energy Assistance Program Federal Award Numbers: 2301GALIEA (Year: 2023), 2301GALIEE (Year: 2023), 2301GALIEI (Year: 2023) Questioned Costs: None Identified Description: The Department of Human Services should improve internal controls to ensure information associated with households assisted by the Low-Income Home Energy Assistance Program is reported accurately and timely. Background Information: The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes awards available to states, territories, and Native American tribes for the purpose of assisting low-income households meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Department of Human Services (DHS) delivers a wide range of services designed to promote self-sufficiency, safety, and well-being for all Georgians and therefore, is designated as the custodian of the LIHEAP funds for the State of Georgia (State). In that capacity, the DHS is required to report information relating to the households served to the U.S. Department of Health and Human Services (HHS). This information is reported on the Annual Report on Households Assisted by LIHEAP, which includes details such as the number of households assisted, poverty levels, type of assistance received (heating, cooling, crisis, and weatherization), owner/renter status, and various demographic data. The HHS Secretary compiles the information submitted by each state agency and submits a report to Congress annually. Congress uses this annual report in its oversight of each recipient’s administration of the LIHEAP program. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in Title 45 CFR 96.82 reflect requirements for reporting on households assisted by LIHEAP and state, “Each grantee which is a State… shall submit to the Department, as part of its LIHEAP grant application, the data… for the 12-month period corresponding to the Federal fiscal year (October 1-September 30) preceding the fiscal year for which funds are requested. The data shall be reported separately for LIHEAP heating, cooling, crisis, and weatherization assistance.” Condition: Our examination of the Annual Report on Households Assisted by LIHEAP included a review of 73 line items and revealed the following deficiencies: • The first version of the report provided to auditors had data reported on 36 line items that did not match supporting documentation. • A subsequent report was resubmitted to correct those items and contained 23 line items that were not fully corrected and did not match supporting documentation. Cause: Through discussion with management, it was noted that the original report that was submitted to HHS in December 2023 was rejected for corrections. During the revision process, numbers were changed in error and were not caught by the review process. Effect: The deficiencies noted in the Annual Report on Households Assisted by LIHEAP resulted in noncompliance with federal regulations. The reporting of incorrect information could also affect appropriations to the LIHEAP program in the following fiscal year and could reduce the amount received by the state for the LIHEAP program in subsequent years. Furthermore, the State’s LIHEAP data may not have been included in the HHS Secretary’s report to Congress as it reflected errors and has not yet been accepted and finalized by HHS. Recommendation: We recommend that DHS: • Follow established processes and procedures associated with LIHEAP special reporting requirements; • Clearly define roles and responsibilities for personnel involved in the reporting process to ensure that the reports are completed appropriately and accurately; and • Incorporate additional oversight, training, and/or staff to aid in the reporting process, including the reporting of accurate and appropriate data elements, as applicable. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-025 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.044 – Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers 93.045 – Special Programs for the Aging, Title III, Part C, Nutrition Services 93.053 – Nutrition Services Incentive Program 93.558 – Temporary Assistance for Needy Families 93.568 – Low-Income Home Energy Assistance Program 93.667 – Social Services Block Grant Federal Award Numbers: 2401GAOACM (Year: 2024), 2401GAOAHD (Year: 2024), 2401GATANF (Year: 2024), 2401GALIEI (Year: 2024), 2401GASOSR (Year: 2024), 2401GALIEA (Year: 2024), 2401GAOANS (Year: 2024), 2401GAOASS (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-020, 2022-022 Description: The Georgia Department of Human Services should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Aging Cluster is comprised of various programs that are intended to assist states and area agencies on aging in facilitating the development and implementation of a comprehensive, coordinated system for providing long-term in home and community-based settings, in a manner responsive to the needs and preferences of older individuals and their family caregivers; providing nutrition services to reduce hunger and food insecurity, promote socialization of older individuals, and promote the health and well-being of older individuals by helping them gain access to nutrition and other disease prevention and health promotion services to delay the onset of adverse health conditions resulting from poor nutritional health or sedentary behavior; and providing resource incentives to encourage and reward effective and efficient performance in the delivery of nutritious meals to older individuals. The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that makes grants available to states, territories, and Native American tribes for the purpose of assisting low-income households to meet the costs of home energy, increase their energy self-sufficiency, and reduce their vulnerability resulting from energy needs. Through LIHEAP, states provide federally funded assistance to meet the costs associated with home energy bills and low-cost weatherization and provide energy crisis support. The Temporary Assistance for Needy Families (TANF) programs were designed to provide time-limited assistance to needy families with children so that the children can be cared for in their own homes or in the homes of relatives; to end dependence of needy parents on government benefits by promoting job preparation, work, and marriage; to prevent and reduce out-of-wedlock pregnancies, including establishing prevention and reduction goals; and to encourage the formation and maintenance of two-parent families. The Social Services Block Grant (SSBG) is a flexible funding source that allows states and territories to tailor social service programming to their population’s needs. Through the SSBG, states provide essential social services that help achieve a myriad of goals to reduce dependency and promote self-sufficiency; protect children and adults from neglect, abuse, and exploitation; and help individuals who are unable to take care of themselves to stay in their homes or to find the best institutional arrangements. Funds associated with the Aging Cluster, LIHEAP, TANF, and SSBG programs are provided to the Georgia Department of Human Services (DHS) for allocation to eligible subrecipients. Because the DHS subgrants program funds to these various entities, the DHS must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006, in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of the Aging Cluster, LIHEAP, TANF, and SSBG program funds, is accessible via the USASpending.gov website. As part of our fiscal year 2024 audit, we followed up on the DHS’s efforts to implement a corrective action plan in response to the prior year findings in which we reported that the DHS failed to submit subaward data for the Aging Cluster, LIHEAP, and SSBG programs to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the DHS was unable to fully implement their corrective action plan prior to fiscal year-end. Criteria: As a recipient of federal awards, the DHS is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the DHS, who make first-tier subawards of $30,000 or more are required to register in the FSRS. Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the Aging Cluster, LIHEAP, TANF, and SSBG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports until the final month of the year under review. For the Aging Cluster programs, auditors identified 12 subrecipients with 43 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the Aging programs, auditors noted the following deficiencies: • A sample of six subawards or subaward modifications totaling $12,811,263 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that one subaward totaling $6,483,435 had not been reported as of the end of audit fieldwork and one subaward totaling $2,352,697 was reported after the omission was identified by auditors. The additional four subaward actions totaling $3,975,131 were not reported timely. For the LIHEAP program, auditors identified 18 subrecipients with 56 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the LIHEAP program, auditors noted the following deficiencies: • A sample of 12 subawards or subaward modifications totaling $25,488,503 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that four of these subaward actions totaling $1,331,111 were reported after their omission was identified by auditors and the additional eight subaward actions totaling $24,157,392 were not reported timely. For the TANF program, auditors identified 27 subrecipients with 28 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the TANF program, auditors noted the following deficiencies: • A sample of four subawards totaling $8,339,289 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these four subawards were not reported timely. • Additionally, auditors compared all subawards reported on the USASpending.gov website to the subrecipient listing for the period under review and noted that two subawards totaling $261,715 had not been reported as of the end of audit fieldwork and one subaward totaling $1,289,403 was reported after the omission was identified by auditors. For the SSBG program, auditors identified 12 subrecipients with 19 first-tier subawards or subaward modifications of $30,000 or more during the period under review. Upon performing testing over FFATA reporting associated with the SSBG program, auditors noted the following deficiency: • A sample of two subawards totaling $1,081,458 was randomly selected for testing using a non-statistical sampling method. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that these two subawards were not reported timely. Cause: Through discussion with management, it was noted that high staff turnover caused delays in reporting information by the required deadlines. Although improvements were implemented to identify the roles and responsibilities of personnel involved in the FFATA reporting process related to these programs, the subaward information was not completely and accurately reported through the FSRS, as required. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review all expenditure data associated with the State of Georgia’s Aging Cluster, LIHEAP, TANF, and SSBG programs. Recommendation: We recommend that the DHS: • Follow established processes and procedures associated with the FFATA reporting requirements; and • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner. Views of Responsible Officials: The Georgia Department of Human Services concurs with the finding.
2024-027 Improve Controls over Eligibility Determinations Compliance Requirement: Eligibility Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.767 – Children’s Health Insurance Program 93.767 – COVID-19 – Children’s Health Insurance Program Federal Award Numbers: 2305GA5021 (Year: 2023), 2405GA5021 (Year: 2024) Questioned Costs: $380 Description: The Department of Community Health and Department of Human Services did not have adequate controls in place to ensure that the required continuing eligibility determinations are performed. Background Information: The Department of Community Health (DCH) administers the Children’s Health Insurance Program (CHIP) that provides child medical coverage to low-income families who exceed Medicaid income limits. CHIP is a large public assistance program in Georgia with federal and state funds totaling approximately $627 million for fiscal year 2024. Eligibility for the CHIP program is determined by the Division of Family and Children Services (DFCS), a division within the Department of Human Services (DHS), which has offices in each of the 159 counties in the State of Georgia. Once eligibility information has been obtained, the DFCS enters the individual into the Georgia Gateway eligibility system and an approval or denial notice is generated. The Georgia Medicaid Management Information System (GAMMIS) is updated through the Georgia Gateway interface when eligibility for a member is approved. When eligibility is denied, the DFCS sends the denial notice to the DCH, which triggers the removal of the denied member from GAMMIS. Criteria: As recipients of federal awards, both the DCH and the DHS are required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 – Internal Controls. The eligibility determination requirements for CHIP members are addressed in Chapter 2200, Section 55 – Age (Family Medicaid) of the DHS Medicaid Manual. In accordance with provisions reflected in the Medicaid Manual, claims should only be paid on behalf of recipients who meet the eligibility criteria. Condition: Our audit of the CHIP program revealed deficiencies in the performance of eligibility determinations. During fiscal year 2024, the DCH paid CHIP benefits totaling $626,925,513 for 481,517 claims transactions. We used a nonstatistical sampling method to select a random sample of 60 benefit payments from this population and tested the sample to determine if eligibility determinations were performed appropriately. Upon completing this testing, it was noted that two members were denied by the DFCS in Georgia Gateway but remained active in GAMMIS in error. Questioned Costs: Known questioned costs of $380 were identified for benefit payments to the two ineligible CHIP members. The Federal and State share of questioned cost is approximately $296 and $84, respectively. Using the total population amount of $626,925,513, we project the likely questioned costs to be approximately $50,016,877. The Federal and State share of likely questioned costs is approximately $38,993,157 and $11,023,720, respectively. Cause: The processes that the DFCS performed did not ensure the required eligibility determinations were made for all CHIP members. Also, while the DCH has systems in place to automate the eligibility process, the systems (Georgia Gateway and GAMMIS) were not properly interfaced. This resulted in a failure to effectively update member eligibility data between the two platforms. Effect: The deficiencies in eligibility determinations resulted in material noncompliance with federal regulations. Also, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. In addition, the DCH may be providing CHIP benefits to ineligible individuals and claiming federal reimbursement for unallowable expenditures. Recommendation: The DCH and DHS management should strengthen oversight of the DFCS eligibility determinations for CHIP members to ensure they are being performed as required. Specifically, management should: • Dedicate the necessary resources to ensure that the Georgia Gateway and GAMMIS systems are interfaced properly; • Oversee a reconciliation process between members denied within Georgia Gateway and members removed within GAMMIS; and • The DHS management should continue to provide training associated with these compliance requirements to new hires. We also recommend management consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
2024-027 Improve Controls over Eligibility Determinations Compliance Requirement: Eligibility Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.767 – Children’s Health Insurance Program 93.767 – COVID-19 – Children’s Health Insurance Program Federal Award Numbers: 2305GA5021 (Year: 2023), 2405GA5021 (Year: 2024) Questioned Costs: $380 Description: The Department of Community Health and Department of Human Services did not have adequate controls in place to ensure that the required continuing eligibility determinations are performed. Background Information: The Department of Community Health (DCH) administers the Children’s Health Insurance Program (CHIP) that provides child medical coverage to low-income families who exceed Medicaid income limits. CHIP is a large public assistance program in Georgia with federal and state funds totaling approximately $627 million for fiscal year 2024. Eligibility for the CHIP program is determined by the Division of Family and Children Services (DFCS), a division within the Department of Human Services (DHS), which has offices in each of the 159 counties in the State of Georgia. Once eligibility information has been obtained, the DFCS enters the individual into the Georgia Gateway eligibility system and an approval or denial notice is generated. The Georgia Medicaid Management Information System (GAMMIS) is updated through the Georgia Gateway interface when eligibility for a member is approved. When eligibility is denied, the DFCS sends the denial notice to the DCH, which triggers the removal of the denied member from GAMMIS. Criteria: As recipients of federal awards, both the DCH and the DHS are required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 – Internal Controls. The eligibility determination requirements for CHIP members are addressed in Chapter 2200, Section 55 – Age (Family Medicaid) of the DHS Medicaid Manual. In accordance with provisions reflected in the Medicaid Manual, claims should only be paid on behalf of recipients who meet the eligibility criteria. Condition: Our audit of the CHIP program revealed deficiencies in the performance of eligibility determinations. During fiscal year 2024, the DCH paid CHIP benefits totaling $626,925,513 for 481,517 claims transactions. We used a nonstatistical sampling method to select a random sample of 60 benefit payments from this population and tested the sample to determine if eligibility determinations were performed appropriately. Upon completing this testing, it was noted that two members were denied by the DFCS in Georgia Gateway but remained active in GAMMIS in error. Questioned Costs: Known questioned costs of $380 were identified for benefit payments to the two ineligible CHIP members. The Federal and State share of questioned cost is approximately $296 and $84, respectively. Using the total population amount of $626,925,513, we project the likely questioned costs to be approximately $50,016,877. The Federal and State share of likely questioned costs is approximately $38,993,157 and $11,023,720, respectively. Cause: The processes that the DFCS performed did not ensure the required eligibility determinations were made for all CHIP members. Also, while the DCH has systems in place to automate the eligibility process, the systems (Georgia Gateway and GAMMIS) were not properly interfaced. This resulted in a failure to effectively update member eligibility data between the two platforms. Effect: The deficiencies in eligibility determinations resulted in material noncompliance with federal regulations. Also, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. In addition, the DCH may be providing CHIP benefits to ineligible individuals and claiming federal reimbursement for unallowable expenditures. Recommendation: The DCH and DHS management should strengthen oversight of the DFCS eligibility determinations for CHIP members to ensure they are being performed as required. Specifically, management should: • Dedicate the necessary resources to ensure that the Georgia Gateway and GAMMIS systems are interfaced properly; • Oversee a reconciliation process between members denied within Georgia Gateway and members removed within GAMMIS; and • The DHS management should continue to provide training associated with these compliance requirements to new hires. We also recommend management consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
2024-024 Improve Controls over Medicaid Capitation Payment Rates Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 – COVID -19 – Medical Assistance Program (Medicaid: Title XIX) Federal Award Numbers: 2305GA5MAP (Year: 2023), 2405GA5MAP (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-016, 2022-017 Description: The Department of Community Health made Medicaid capitation payments for Medicaid Managed Care recipients using the improper payment rates. Background Information: The Department of Community Health (DCH) administers the State of Georgia’s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of the State’s largest public assistance programs with federal and state funds totaling $16 billion for fiscal year 2024. The DCH, the State’s Medicaid agency, administers Georgia’s managed-care program. The program is a partnership between the DCH and private care management organizations (MCOs). The State pays a monthly fixed rate per person (capitation rate) without regard to the actual medical services utilized to cover the costs of Medicaid claims. Managed care is a prepaid, comprehensive system of medical and health care delivery, including preventive, primary, specialty and ancillary health care services. The program is designed to reduce the cost of providing health benefits, improve the quality of care and deliver health care to clients. Capitation payments for the year totaled $5 billion (federal and state). As part of our fiscal year 2024 audit, we followed up on the DCH’s efforts to implement a corrective action plan in response to the prior year finding in which we reported that the DCH made Medicaid capitation payments for Medicaid Managed Care recipients using the improper payment rates. While corrective action plans associated with overpayments were implemented during the period under review, the DCH was unable to fully implement their corrective action plan and correct all rates prior to fiscal year-end. Criteria: As a recipient of federal awards, the DCH is required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 – Internal Controls. The Uniform Guidance, Section 200.53 – Improper Payment states, “(a) Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and (b) Improper payment includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper.” Condition: Our audit of the Medicaid program revealed deficiencies in the capitation payments paid to MCOs for Managed Care members. For a population of 42 million capitation payments paid to MCOs for Managed Care members, auditors utilized data analytics to compare the approved payment rates that should have been used to the actual rates used during the fiscal year under review and identified all capitation overpayments and underpayments. Based upon this review, we identified 1.2 million underpayments totaling $6,200,718 during the fiscal year under review. Cause: In August 2021, the Centers for Medicare and Medicaid Services (CMS) approved the rates that should have been used to calculate capitation payments during the period under review. The DCH actuary, then, updated these rates to account for risk adjustments. However, these rates were not accurately implemented in the Georgia Medicaid Management Information System (GAMMIS) resulting in improper payments to MCOs. Effect: Without effective controls in place, the DCH increases its risk of providing improper payments to MCOs and not detecting improper payments. The improper payments resulted in noncompliance with federal regulations. In addition, grant provisions allow the grantor to penalize DCH for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits in the future. Recommendation: The DCH management should dedicate the necessary resources to enter accurate rates within GAMMIS each year to ensure improper capitation payments are not made to MCOs for Managed Care members. Views of Responsible Officials: We concur with this finding.
2024-028 Improve Controls over Medicaid Eligibility Determinations for Ex Parte Members Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 – COVID -19 – Medical Assistance Program (Medicaid: Title XIX) Federal Award Numbers: 2305GA5MAP (Year: 2023), 2405GA5MAP (Year: 2024) Questioned Costs: $6,244 Description: The Department of Community Health and Department of Human Services did not have effective internal controls in place to ensure the required continuing Medicaid eligibility determinations are performed for Supplemental Security Income Ex Parte members. Background Information: The Department of Community Health (DCH) administers the State’s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of Georgia’s largest public assistance programs with federal and state funds totaling approximately $16 billion for fiscal year 2024. Eligibility for the Medicaid program is determined by the Division of Family and Children Services (DFCS), a division within the Department of Human Services (DHS), which has offices in each of the 159 counties in the State of Georgia. Individuals who are eligible for Supplemental Security Income (SSI) are also eligible for the Medicaid benefits, and those whose SSI benefits are terminated or denied by the Social Security Administration are SSI Ex Parte members for the Medicaid program. For those members, the DCH makes temporary determinations of continued eligibility under a new Ex Parte Medicaid Class of Assistance in the Georgia Medicaid Management Information System (GAMMIS). The DFCS is responsible for performing a Continuing Medicaid Determination (CMD) for each new SSI Ex Parte member. The DFCS uses the daily Ex Parte Determination Reports generated by GAMMIS to identify the new SSI Ex Parte members that require a CMD. GAMMIS also generates monthly Ex Parte Non-Confirmation Reports, which identify all entries from the Ex Parte Determination Reports that are over 30-days old and have not yet been acted upon. When a CMD is complete, the DFCS enters the individual in the Georgia Gateway eligibility system and an approval or denial notice is generated. GAMMIS is updated through the Georgia Gateway interface when eligibility for a member is approved. When eligibility is denied, the DFCS sends the denial notice to the DCH, which triggers the removal of the denied member from GAMMIS. Criteria: As recipients of federal awards, both the DCH and the DHS are required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 – Internal Controls. The eligibility determination requirements for SSI Ex Parte members are addressed in Chapter 2700, Section 50 - DCH Reports - Ex Parte Lists of the DHS Medicaid Manual. In accordance with provisions reflected in the Medicaid Manual, the DFCS is required to perform eligibility determinations of those members whose SSI benefits are terminated or denied. Condition: Our audit of the Medicaid program revealed deficiencies in the performance of eligibility determinations for SSI Ex Parte members. During fiscal year 2024, the DCH paid Medicaid SSI Ex Parte members benefits totaling $47,180,194 for 203,551 claims transactions. We used a nonstatistical sampling method to select a random sample of 60 Ex Parte benefit payments from this population and tested the sample to determine if eligibility determinations were performed appropriately. The following deficiencies were identified: • 29 members were denied by the DFCS in Georgia Gateway but remained active in GAMMIS in error. • One member who lived out of state remained active in GAMMIS. • 15 members did not have a CMD in Georgia Gateway relating to Ex Parte. • One member was not revalidated appropriately. Questioned Costs: Known questioned costs of $6,244 were identified for benefit payments to the 46 ineligible SSI Ex Parte members. The Federal and State share of questioned cost is approximately $4,145 and $2,099, respectively. Using the total population amount of $47,180,194, we project the likely questioned costs to be approximately $34,819,965. The Federal and State share of likely questioned costs is approximately $23,113,866 and $11,706,099, respectively. Cause: The processes that the DFCS performed did not ensure the required eligibility determinations were made for all SSI Ex Parte members. Also, while the DCH has systems in place to automate the eligibility process, the systems (Georgia Gateway and GAMMIS) were not properly interfaced. This resulted in a failure to effectively update member eligibility data between the two platforms. Effect: The deficiencies in eligibility determinations resulted in noncompliance with federal regulations. Also, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. In addition, the DCH may be providing Medicaid benefits to ineligible individuals and claiming federal reimbursement for unallowable expenditures. Recommendation: The DCH and DHS management should strengthen oversight of the DFCS eligibility determinations for SSI Ex Parte members to make certain they are being performed timely and accurately. Specifically, management should: • Dedicate the necessary resources to ensure that the Georgia Gateway and GAMMIS systems are interfaced properly; • Oversee a reconciliation process between members with completed CMDs to members listed on the daily and monthly Ex Parte Determination Reports; and • The DHS management should continue to provide training associated with these compliance requirements to new hires. We also recommend that management consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
2024-024 Improve Controls over Medicaid Capitation Payment Rates Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 – COVID -19 – Medical Assistance Program (Medicaid: Title XIX) Federal Award Numbers: 2305GA5MAP (Year: 2023), 2405GA5MAP (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-016, 2022-017 Description: The Department of Community Health made Medicaid capitation payments for Medicaid Managed Care recipients using the improper payment rates. Background Information: The Department of Community Health (DCH) administers the State of Georgia’s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of the State’s largest public assistance programs with federal and state funds totaling $16 billion for fiscal year 2024. The DCH, the State’s Medicaid agency, administers Georgia’s managed-care program. The program is a partnership between the DCH and private care management organizations (MCOs). The State pays a monthly fixed rate per person (capitation rate) without regard to the actual medical services utilized to cover the costs of Medicaid claims. Managed care is a prepaid, comprehensive system of medical and health care delivery, including preventive, primary, specialty and ancillary health care services. The program is designed to reduce the cost of providing health benefits, improve the quality of care and deliver health care to clients. Capitation payments for the year totaled $5 billion (federal and state). As part of our fiscal year 2024 audit, we followed up on the DCH’s efforts to implement a corrective action plan in response to the prior year finding in which we reported that the DCH made Medicaid capitation payments for Medicaid Managed Care recipients using the improper payment rates. While corrective action plans associated with overpayments were implemented during the period under review, the DCH was unable to fully implement their corrective action plan and correct all rates prior to fiscal year-end. Criteria: As a recipient of federal awards, the DCH is required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 – Internal Controls. The Uniform Guidance, Section 200.53 – Improper Payment states, “(a) Improper payment means any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; and (b) Improper payment includes any payment to an ineligible party, any payment for an ineligible good or service, any duplicate payment, any payment for a good or service not received (except for such payments where authorized by law), any payment that does not account for credit for applicable discounts, and any payment where insufficient or lack of documentation prevents a reviewer from discerning whether a payment was proper.” Condition: Our audit of the Medicaid program revealed deficiencies in the capitation payments paid to MCOs for Managed Care members. For a population of 42 million capitation payments paid to MCOs for Managed Care members, auditors utilized data analytics to compare the approved payment rates that should have been used to the actual rates used during the fiscal year under review and identified all capitation overpayments and underpayments. Based upon this review, we identified 1.2 million underpayments totaling $6,200,718 during the fiscal year under review. Cause: In August 2021, the Centers for Medicare and Medicaid Services (CMS) approved the rates that should have been used to calculate capitation payments during the period under review. The DCH actuary, then, updated these rates to account for risk adjustments. However, these rates were not accurately implemented in the Georgia Medicaid Management Information System (GAMMIS) resulting in improper payments to MCOs. Effect: Without effective controls in place, the DCH increases its risk of providing improper payments to MCOs and not detecting improper payments. The improper payments resulted in noncompliance with federal regulations. In addition, grant provisions allow the grantor to penalize DCH for noncompliance by suspending or terminating the award or withholding future awards. This may prevent eligible individuals from receiving benefits in the future. Recommendation: The DCH management should dedicate the necessary resources to enter accurate rates within GAMMIS each year to ensure improper capitation payments are not made to MCOs for Managed Care members. Views of Responsible Officials: We concur with this finding.
2024-028 Improve Controls over Medicaid Eligibility Determinations for Ex Parte Members Compliance Requirement: Eligibility Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.778 - Medical Assistance Program (Medicaid: Title XIX) 93.778 – COVID -19 – Medical Assistance Program (Medicaid: Title XIX) Federal Award Numbers: 2305GA5MAP (Year: 2023), 2405GA5MAP (Year: 2024) Questioned Costs: $6,244 Description: The Department of Community Health and Department of Human Services did not have effective internal controls in place to ensure the required continuing Medicaid eligibility determinations are performed for Supplemental Security Income Ex Parte members. Background Information: The Department of Community Health (DCH) administers the State’s Medicaid program that provides payments for medical assistance to low-income individuals. Medicaid is one of Georgia’s largest public assistance programs with federal and state funds totaling approximately $16 billion for fiscal year 2024. Eligibility for the Medicaid program is determined by the Division of Family and Children Services (DFCS), a division within the Department of Human Services (DHS), which has offices in each of the 159 counties in the State of Georgia. Individuals who are eligible for Supplemental Security Income (SSI) are also eligible for the Medicaid benefits, and those whose SSI benefits are terminated or denied by the Social Security Administration are SSI Ex Parte members for the Medicaid program. For those members, the DCH makes temporary determinations of continued eligibility under a new Ex Parte Medicaid Class of Assistance in the Georgia Medicaid Management Information System (GAMMIS). The DFCS is responsible for performing a Continuing Medicaid Determination (CMD) for each new SSI Ex Parte member. The DFCS uses the daily Ex Parte Determination Reports generated by GAMMIS to identify the new SSI Ex Parte members that require a CMD. GAMMIS also generates monthly Ex Parte Non-Confirmation Reports, which identify all entries from the Ex Parte Determination Reports that are over 30-days old and have not yet been acted upon. When a CMD is complete, the DFCS enters the individual in the Georgia Gateway eligibility system and an approval or denial notice is generated. GAMMIS is updated through the Georgia Gateway interface when eligibility for a member is approved. When eligibility is denied, the DFCS sends the denial notice to the DCH, which triggers the removal of the denied member from GAMMIS. Criteria: As recipients of federal awards, both the DCH and the DHS are required to establish and maintain effective internal controls over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Section 200.303 – Internal Controls. The eligibility determination requirements for SSI Ex Parte members are addressed in Chapter 2700, Section 50 - DCH Reports - Ex Parte Lists of the DHS Medicaid Manual. In accordance with provisions reflected in the Medicaid Manual, the DFCS is required to perform eligibility determinations of those members whose SSI benefits are terminated or denied. Condition: Our audit of the Medicaid program revealed deficiencies in the performance of eligibility determinations for SSI Ex Parte members. During fiscal year 2024, the DCH paid Medicaid SSI Ex Parte members benefits totaling $47,180,194 for 203,551 claims transactions. We used a nonstatistical sampling method to select a random sample of 60 Ex Parte benefit payments from this population and tested the sample to determine if eligibility determinations were performed appropriately. The following deficiencies were identified: • 29 members were denied by the DFCS in Georgia Gateway but remained active in GAMMIS in error. • One member who lived out of state remained active in GAMMIS. • 15 members did not have a CMD in Georgia Gateway relating to Ex Parte. • One member was not revalidated appropriately. Questioned Costs: Known questioned costs of $6,244 were identified for benefit payments to the 46 ineligible SSI Ex Parte members. The Federal and State share of questioned cost is approximately $4,145 and $2,099, respectively. Using the total population amount of $47,180,194, we project the likely questioned costs to be approximately $34,819,965. The Federal and State share of likely questioned costs is approximately $23,113,866 and $11,706,099, respectively. Cause: The processes that the DFCS performed did not ensure the required eligibility determinations were made for all SSI Ex Parte members. Also, while the DCH has systems in place to automate the eligibility process, the systems (Georgia Gateway and GAMMIS) were not properly interfaced. This resulted in a failure to effectively update member eligibility data between the two platforms. Effect: The deficiencies in eligibility determinations resulted in noncompliance with federal regulations. Also, grant provisions allow the grantor to penalize the DCH for noncompliance by suspending or terminating the award or withholding future awards. In addition, the DCH may be providing Medicaid benefits to ineligible individuals and claiming federal reimbursement for unallowable expenditures. Recommendation: The DCH and DHS management should strengthen oversight of the DFCS eligibility determinations for SSI Ex Parte members to make certain they are being performed timely and accurately. Specifically, management should: • Dedicate the necessary resources to ensure that the Georgia Gateway and GAMMIS systems are interfaced properly; • Oversee a reconciliation process between members with completed CMDs to members listed on the daily and monthly Ex Parte Determination Reports; and • The DHS management should continue to provide training associated with these compliance requirements to new hires. We also recommend that management consult with the grantor to discuss whether the questioned costs identified in the audit should be repaid. Views of Responsible Officials: We concur with this finding.
2024-030 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.958 – Block Grants for Community Mental Health Services 93.958 – COVID-19 – Block Grants for Community Mental Health Services 93.959 – Block Grants for Prevention and Treatment of Substance Abuse 93.959 – COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers: B09SM083833 (Year: 2021), B09SM086001 (Year: 2022), B09SM087352 (Year: 2023), B09SM089617 (Year: 2024), B09SM084001 (Year: 2021), B09SM085388 (Year: 2021), B09SM087284 (Year: 2021), B09SM085916 (Year: 2021), B08TI083934 (Year: 2021), B08TI084623 (Year: 2022), B08TI084637 (Year: 2022), B08TI085799 (Year: 2023), B08TI087031 (Year: 2024), B08TI083530 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-023, 2022-025 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls over required Federal Funding Accountability and Transparency Act reporting to ensure that information is reported appropriately and timely. Background Information: The Block Grant for Community Mental Health Services Block Grant (MHBG) was created to provide funds to states and territories to enable them to carry out their respective plans for providing comprehensive community-based mental health services for adults with serious mental illness and children with serious emotional disturbances. MHBG program funds are allocated to individual states based upon a formula. This funding may be distributed to cities, counties, or service providers within each state to carry out activities associated with the state plan. The objective of the Substance Abuse Prevention and Treatment Block Grant (SABG) program is to provide funds to states, territories, and one Indian tribe for the purpose of planning, carrying out, and evaluating activities to prevent and treat, Substance Abuse (SA) and other related activities as authorized by the statute. Funds associated with the MHBG and SABG programs are provided to the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) for allocation to eligible entities, including local health agencies, community-based organizations, and other public or private entities, through competitive subgrants. Because DBHDD subgrants MHBG and SABG program funds to various entities, the DBHDD must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of MHBG and SABG program funds, is accessible via the USASpending.gov website. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including DBHDD, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the MHBG and SABG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports. Additionally, upon performing testing over FFATA reporting, auditors noted the following deficiencies: • From a population of 38 first-tier subawards of $30,000 or more associated with the MHBG program, a sample of eight subawards was randomly selected for testing using a non-statistical sampling method. Additionally, 12 individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 14 subawards totaling $10,761,528 were not reported and all 20 subawards tested were not reported timely. • From a population of 171 first-tier subawards of $30,000 or more associated with the SABG program, a sample of 35 subawards was randomly selected for testing using a non-statistical sampling method. Additionally, six individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 25 subawards totaling $14,059,807 were not reported, one subaward that was reported was missing a key element, and all 41 subawards tested were not reported timely. Cause: Formal internal control processes for FFATA reporting were established but were not implemented during the fiscal year under review. As a result, noncompliance occurred with respect to FFATA reporting. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review accurate expenditure data associated with the State of Georgia’s MHBG and SABG programs. Recommendation: We recommend that the DBHDD: • Implement and document processes and procedures associated with the FFATA reporting requirements. • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Review, update, and maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: DBHDD agrees with the finding, and we have implemented enhanced operating procedures as well as updated our policy related to this function.
2024-030 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.958 – Block Grants for Community Mental Health Services 93.958 – COVID-19 – Block Grants for Community Mental Health Services 93.959 – Block Grants for Prevention and Treatment of Substance Abuse 93.959 – COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers: B09SM083833 (Year: 2021), B09SM086001 (Year: 2022), B09SM087352 (Year: 2023), B09SM089617 (Year: 2024), B09SM084001 (Year: 2021), B09SM085388 (Year: 2021), B09SM087284 (Year: 2021), B09SM085916 (Year: 2021), B08TI083934 (Year: 2021), B08TI084623 (Year: 2022), B08TI084637 (Year: 2022), B08TI085799 (Year: 2023), B08TI087031 (Year: 2024), B08TI083530 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-023, 2022-025 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls over required Federal Funding Accountability and Transparency Act reporting to ensure that information is reported appropriately and timely. Background Information: The Block Grant for Community Mental Health Services Block Grant (MHBG) was created to provide funds to states and territories to enable them to carry out their respective plans for providing comprehensive community-based mental health services for adults with serious mental illness and children with serious emotional disturbances. MHBG program funds are allocated to individual states based upon a formula. This funding may be distributed to cities, counties, or service providers within each state to carry out activities associated with the state plan. The objective of the Substance Abuse Prevention and Treatment Block Grant (SABG) program is to provide funds to states, territories, and one Indian tribe for the purpose of planning, carrying out, and evaluating activities to prevent and treat, Substance Abuse (SA) and other related activities as authorized by the statute. Funds associated with the MHBG and SABG programs are provided to the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) for allocation to eligible entities, including local health agencies, community-based organizations, and other public or private entities, through competitive subgrants. Because DBHDD subgrants MHBG and SABG program funds to various entities, the DBHDD must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of MHBG and SABG program funds, is accessible via the USASpending.gov website. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including DBHDD, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the MHBG and SABG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports. Additionally, upon performing testing over FFATA reporting, auditors noted the following deficiencies: • From a population of 38 first-tier subawards of $30,000 or more associated with the MHBG program, a sample of eight subawards was randomly selected for testing using a non-statistical sampling method. Additionally, 12 individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 14 subawards totaling $10,761,528 were not reported and all 20 subawards tested were not reported timely. • From a population of 171 first-tier subawards of $30,000 or more associated with the SABG program, a sample of 35 subawards was randomly selected for testing using a non-statistical sampling method. Additionally, six individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 25 subawards totaling $14,059,807 were not reported, one subaward that was reported was missing a key element, and all 41 subawards tested were not reported timely. Cause: Formal internal control processes for FFATA reporting were established but were not implemented during the fiscal year under review. As a result, noncompliance occurred with respect to FFATA reporting. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review accurate expenditure data associated with the State of Georgia’s MHBG and SABG programs. Recommendation: We recommend that the DBHDD: • Implement and document processes and procedures associated with the FFATA reporting requirements. • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Review, update, and maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: DBHDD agrees with the finding, and we have implemented enhanced operating procedures as well as updated our policy related to this function.
2024-029 Improve Controls over Period of Performance Compliance Requirement: Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Number and Title: 93.959 – Block Grants for Prevention and Treatment of Substance Abuse Federal Award Number: B08TI084637 (Year: 2022) Questioned Costs: $236,557 Repeat of Prior Year Finding: 2023-022 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls to ensure that program costs are obligated within the period of performance and liquidated within the allowed time period. Background Information: The objective of the Substance Abuse Prevention and Treatment Block Grant (SABG) program is to provide funds to states, territories, and one Indian tribe for planning, carrying out and evaluating activities to prevent and treat Substance Abuse (SA) and other related activities as authorized by the statute. Funds associated with the SABG program are administered by the Department of Behavioral Health and Developmental Disabilities (DBHDD). The DBHDD is responsible for becoming familiar with the performance period during which recipients must obligate and liquidate costs for this program. These periods typically align with the federal fiscal year of October 1 through September 30, and payments for costs incurred before a grant award’s beginning date or after the liquidation period are not allowed without the grantor’s prior approval. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented, (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, the DBHDD’s policies 17-202 – Federal Fund Source and Parent Project Code Assignments and 17-203 – Federal Financial Report Preparation, Reconciliation, and Submission prescribe actions that must be taken by staff to ensure that costs are obligated, incurred, and liquidated within the appropriate period as specified in each grant award’s terms and conditions. Condition: Our audit of the SABG program included a review of expenditures with performance period ending dates during the audit period to ensure that the amounts were obligated and liquidated within the allowed time period. The entire population of nine expenditures was tested to ensure that the amounts were obligated and liquidated within the appropriate time period. It was noted that these nine transactions were not liquidated within 90 days of the end of the period of performance as required. Additionally, these expenditures were not identified by the DBHDD and reclassified to an appropriate, subsequent award number as is reflected within the DBHDD’s internal policy. Furthermore, one of these same expenditures was incurred outside of the period of performance. Questioned Costs: Known questioned costs of $236,557 related to the SABG program were identified for expenditures that were paid outside of the allowable liquidation period. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: While the DBHDD had established procedures in place to comply with the period of performance requirements for federal awards, the DBHDD policy governing period of performance does not address the correction of errors in a timely manner as the policy only recommends that corrections be completed during the close-out process for the grant award. Purchase orders associated with federal fund sources were not closed out in a timely manner and led to delays in the overall close-out and correction process for these federal fund sources. Effect: The deficiencies noted in the period of performance process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal period of performance requirements, the DBHDD is at a higher risk of making improper payments and performing inaccurate financial reporting. Recommendation: We recommend that the DBHDD: • Update policy, processes, and procedures associated with period of performance requirements to recommend corrections be made in a timely manner. • Follow currently established grant close-out processes and procedures associated with period of performance requirements. • Incorporate additional oversight, training, and/or staff to aid in the identification of the period of performance to ensure costs are associated with the correct fund source. Views of Responsible Officials: DBHDD agrees with this finding. The Provider Utilization Report was revised in December 2024. The Federal Financial Reporting Group PO closure rights was implemented in January 2025.
2024-030 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.958 – Block Grants for Community Mental Health Services 93.958 – COVID-19 – Block Grants for Community Mental Health Services 93.959 – Block Grants for Prevention and Treatment of Substance Abuse 93.959 – COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers: B09SM083833 (Year: 2021), B09SM086001 (Year: 2022), B09SM087352 (Year: 2023), B09SM089617 (Year: 2024), B09SM084001 (Year: 2021), B09SM085388 (Year: 2021), B09SM087284 (Year: 2021), B09SM085916 (Year: 2021), B08TI083934 (Year: 2021), B08TI084623 (Year: 2022), B08TI084637 (Year: 2022), B08TI085799 (Year: 2023), B08TI087031 (Year: 2024), B08TI083530 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-023, 2022-025 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls over required Federal Funding Accountability and Transparency Act reporting to ensure that information is reported appropriately and timely. Background Information: The Block Grant for Community Mental Health Services Block Grant (MHBG) was created to provide funds to states and territories to enable them to carry out their respective plans for providing comprehensive community-based mental health services for adults with serious mental illness and children with serious emotional disturbances. MHBG program funds are allocated to individual states based upon a formula. This funding may be distributed to cities, counties, or service providers within each state to carry out activities associated with the state plan. The objective of the Substance Abuse Prevention and Treatment Block Grant (SABG) program is to provide funds to states, territories, and one Indian tribe for the purpose of planning, carrying out, and evaluating activities to prevent and treat, Substance Abuse (SA) and other related activities as authorized by the statute. Funds associated with the MHBG and SABG programs are provided to the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) for allocation to eligible entities, including local health agencies, community-based organizations, and other public or private entities, through competitive subgrants. Because DBHDD subgrants MHBG and SABG program funds to various entities, the DBHDD must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of MHBG and SABG program funds, is accessible via the USASpending.gov website. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including DBHDD, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the MHBG and SABG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports. Additionally, upon performing testing over FFATA reporting, auditors noted the following deficiencies: • From a population of 38 first-tier subawards of $30,000 or more associated with the MHBG program, a sample of eight subawards was randomly selected for testing using a non-statistical sampling method. Additionally, 12 individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 14 subawards totaling $10,761,528 were not reported and all 20 subawards tested were not reported timely. • From a population of 171 first-tier subawards of $30,000 or more associated with the SABG program, a sample of 35 subawards was randomly selected for testing using a non-statistical sampling method. Additionally, six individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 25 subawards totaling $14,059,807 were not reported, one subaward that was reported was missing a key element, and all 41 subawards tested were not reported timely. Cause: Formal internal control processes for FFATA reporting were established but were not implemented during the fiscal year under review. As a result, noncompliance occurred with respect to FFATA reporting. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review accurate expenditure data associated with the State of Georgia’s MHBG and SABG programs. Recommendation: We recommend that the DBHDD: • Implement and document processes and procedures associated with the FFATA reporting requirements. • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Review, update, and maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: DBHDD agrees with the finding, and we have implemented enhanced operating procedures as well as updated our policy related to this function.
2024-029 Improve Controls over Period of Performance Compliance Requirement: Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Number and Title: 93.959 – Block Grants for Prevention and Treatment of Substance Abuse Federal Award Number: B08TI084637 (Year: 2022) Questioned Costs: $236,557 Repeat of Prior Year Finding: 2023-022 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls to ensure that program costs are obligated within the period of performance and liquidated within the allowed time period. Background Information: The objective of the Substance Abuse Prevention and Treatment Block Grant (SABG) program is to provide funds to states, territories, and one Indian tribe for planning, carrying out and evaluating activities to prevent and treat Substance Abuse (SA) and other related activities as authorized by the statute. Funds associated with the SABG program are administered by the Department of Behavioral Health and Developmental Disabilities (DBHDD). The DBHDD is responsible for becoming familiar with the performance period during which recipients must obligate and liquidate costs for this program. These periods typically align with the federal fiscal year of October 1 through September 30, and payments for costs incurred before a grant award’s beginning date or after the liquidation period are not allowed without the grantor’s prior approval. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented, (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, the DBHDD’s policies 17-202 – Federal Fund Source and Parent Project Code Assignments and 17-203 – Federal Financial Report Preparation, Reconciliation, and Submission prescribe actions that must be taken by staff to ensure that costs are obligated, incurred, and liquidated within the appropriate period as specified in each grant award’s terms and conditions. Condition: Our audit of the SABG program included a review of expenditures with performance period ending dates during the audit period to ensure that the amounts were obligated and liquidated within the allowed time period. The entire population of nine expenditures was tested to ensure that the amounts were obligated and liquidated within the appropriate time period. It was noted that these nine transactions were not liquidated within 90 days of the end of the period of performance as required. Additionally, these expenditures were not identified by the DBHDD and reclassified to an appropriate, subsequent award number as is reflected within the DBHDD’s internal policy. Furthermore, one of these same expenditures was incurred outside of the period of performance. Questioned Costs: Known questioned costs of $236,557 related to the SABG program were identified for expenditures that were paid outside of the allowable liquidation period. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: While the DBHDD had established procedures in place to comply with the period of performance requirements for federal awards, the DBHDD policy governing period of performance does not address the correction of errors in a timely manner as the policy only recommends that corrections be completed during the close-out process for the grant award. Purchase orders associated with federal fund sources were not closed out in a timely manner and led to delays in the overall close-out and correction process for these federal fund sources. Effect: The deficiencies noted in the period of performance process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal period of performance requirements, the DBHDD is at a higher risk of making improper payments and performing inaccurate financial reporting. Recommendation: We recommend that the DBHDD: • Update policy, processes, and procedures associated with period of performance requirements to recommend corrections be made in a timely manner. • Follow currently established grant close-out processes and procedures associated with period of performance requirements. • Incorporate additional oversight, training, and/or staff to aid in the identification of the period of performance to ensure costs are associated with the correct fund source. Views of Responsible Officials: DBHDD agrees with this finding. The Provider Utilization Report was revised in December 2024. The Federal Financial Reporting Group PO closure rights was implemented in January 2025.
2024-030 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Numbers and Titles: 93.958 – Block Grants for Community Mental Health Services 93.958 – COVID-19 – Block Grants for Community Mental Health Services 93.959 – Block Grants for Prevention and Treatment of Substance Abuse 93.959 – COVID-19 – Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers: B09SM083833 (Year: 2021), B09SM086001 (Year: 2022), B09SM087352 (Year: 2023), B09SM089617 (Year: 2024), B09SM084001 (Year: 2021), B09SM085388 (Year: 2021), B09SM087284 (Year: 2021), B09SM085916 (Year: 2021), B08TI083934 (Year: 2021), B08TI084623 (Year: 2022), B08TI084637 (Year: 2022), B08TI085799 (Year: 2023), B08TI087031 (Year: 2024), B08TI083530 (Year: 2021) Questioned Costs: None Identified Repeat of Prior Year Findings: 2023-023, 2022-025 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls over required Federal Funding Accountability and Transparency Act reporting to ensure that information is reported appropriately and timely. Background Information: The Block Grant for Community Mental Health Services Block Grant (MHBG) was created to provide funds to states and territories to enable them to carry out their respective plans for providing comprehensive community-based mental health services for adults with serious mental illness and children with serious emotional disturbances. MHBG program funds are allocated to individual states based upon a formula. This funding may be distributed to cities, counties, or service providers within each state to carry out activities associated with the state plan. The objective of the Substance Abuse Prevention and Treatment Block Grant (SABG) program is to provide funds to states, territories, and one Indian tribe for the purpose of planning, carrying out, and evaluating activities to prevent and treat, Substance Abuse (SA) and other related activities as authorized by the statute. Funds associated with the MHBG and SABG programs are provided to the Georgia Department of Behavioral Health and Developmental Disabilities (DBHDD) for allocation to eligible entities, including local health agencies, community-based organizations, and other public or private entities, through competitive subgrants. Because DBHDD subgrants MHBG and SABG program funds to various entities, the DBHDD must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. This information, including information associated with the use of MHBG and SABG program funds, is accessible via the USASpending.gov website. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including DBHDD, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our audit of the MHBG and SABG programs revealed there was no evidence of review and approval or a comparable internal control over the FFATA reports. Additionally, upon performing testing over FFATA reporting, auditors noted the following deficiencies: • From a population of 38 first-tier subawards of $30,000 or more associated with the MHBG program, a sample of eight subawards was randomly selected for testing using a non-statistical sampling method. Additionally, 12 individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 14 subawards totaling $10,761,528 were not reported and all 20 subawards tested were not reported timely. • From a population of 171 first-tier subawards of $30,000 or more associated with the SABG program, a sample of 35 subawards was randomly selected for testing using a non-statistical sampling method. Additionally, six individually important first-tier subawards were selected for testing. Auditors examined documentation to determine if the subrecipient’s information was properly reported on the USASpending.gov website. Testing revealed that 25 subawards totaling $14,059,807 were not reported, one subaward that was reported was missing a key element, and all 41 subawards tested were not reported timely. Cause: Formal internal control processes for FFATA reporting were established but were not implemented during the fiscal year under review. As a result, noncompliance occurred with respect to FFATA reporting. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review accurate expenditure data associated with the State of Georgia’s MHBG and SABG programs. Recommendation: We recommend that the DBHDD: • Implement and document processes and procedures associated with the FFATA reporting requirements. • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Review, update, and maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: DBHDD agrees with the finding, and we have implemented enhanced operating procedures as well as updated our policy related to this function.
2024-029 Improve Controls over Period of Performance Compliance Requirement: Period of Performance Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services Pass-Through Entity: None AL Number and Title: 93.959 – Block Grants for Prevention and Treatment of Substance Abuse Federal Award Number: B08TI084637 (Year: 2022) Questioned Costs: $236,557 Repeat of Prior Year Finding: 2023-022 Description: The Georgia Department of Behavioral Health and Developmental Disabilities should improve internal controls to ensure that program costs are obligated within the period of performance and liquidated within the allowed time period. Background Information: The objective of the Substance Abuse Prevention and Treatment Block Grant (SABG) program is to provide funds to states, territories, and one Indian tribe for planning, carrying out and evaluating activities to prevent and treat Substance Abuse (SA) and other related activities as authorized by the statute. Funds associated with the SABG program are administered by the Department of Behavioral Health and Developmental Disabilities (DBHDD). The DBHDD is responsible for becoming familiar with the performance period during which recipients must obligate and liquidate costs for this program. These periods typically align with the federal fiscal year of October 1 through September 30, and payments for costs incurred before a grant award’s beginning date or after the liquidation period are not allowed without the grantor’s prior approval. Criteria: As a recipient of federal awards, the DBHDD is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented, (h) Cost must be incurred during the approved budget period…” Additionally, provisions included in the Uniform Guidance, Section 200.77 state, “Period of performance means the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award.” Further, the DBHDD’s policies 17-202 – Federal Fund Source and Parent Project Code Assignments and 17-203 – Federal Financial Report Preparation, Reconciliation, and Submission prescribe actions that must be taken by staff to ensure that costs are obligated, incurred, and liquidated within the appropriate period as specified in each grant award’s terms and conditions. Condition: Our audit of the SABG program included a review of expenditures with performance period ending dates during the audit period to ensure that the amounts were obligated and liquidated within the allowed time period. The entire population of nine expenditures was tested to ensure that the amounts were obligated and liquidated within the appropriate time period. It was noted that these nine transactions were not liquidated within 90 days of the end of the period of performance as required. Additionally, these expenditures were not identified by the DBHDD and reclassified to an appropriate, subsequent award number as is reflected within the DBHDD’s internal policy. Furthermore, one of these same expenditures was incurred outside of the period of performance. Questioned Costs: Known questioned costs of $236,557 related to the SABG program were identified for expenditures that were paid outside of the allowable liquidation period. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: While the DBHDD had established procedures in place to comply with the period of performance requirements for federal awards, the DBHDD policy governing period of performance does not address the correction of errors in a timely manner as the policy only recommends that corrections be completed during the close-out process for the grant award. Purchase orders associated with federal fund sources were not closed out in a timely manner and led to delays in the overall close-out and correction process for these federal fund sources. Effect: The deficiencies noted in the period of performance process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal period of performance requirements, the DBHDD is at a higher risk of making improper payments and performing inaccurate financial reporting. Recommendation: We recommend that the DBHDD: • Update policy, processes, and procedures associated with period of performance requirements to recommend corrections be made in a timely manner. • Follow currently established grant close-out processes and procedures associated with period of performance requirements. • Incorporate additional oversight, training, and/or staff to aid in the identification of the period of performance to ensure costs are associated with the correct fund source. Views of Responsible Officials: DBHDD agrees with this finding. The Provider Utilization Report was revised in December 2024. The Federal Financial Reporting Group PO closure rights was implemented in January 2025.
Criteria: Nonfederal entities in receipt of federal funds must comply with the requirements of 2 CFR 200.303(a), which require an entity to establish and maintain effective internal control over the federal award to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. This includes properly identifying all federal awards subject to the Uniform Guidance and fairly presenting the required information, including the assistance listing number (ALN), in the schedule of expenditures of federal awards (SEFA). Condition: The schedule of expenditures of federal awards was reissued after an error was identified by management in the schedule of expenditures of federal awards, specifically in the assistance listing number (ALN) under grant IL-2023-028-00, after the report was originally issued. Cause: The District had a minor lapse in internal controls related to the preparation and review of the schedule of expenditures of federal awards. Management detected the error in the ALN number of grant IL-2023-028-00; however, the audit report had already been issued. Effect: Without adequate internal controls over preparation and review of the schedule of expenditures of federal awards, it is possible that material errors would not be detected in a timely manner and could be reported. Questioned Costs: None noted. Recommendation: We recommend that the District review the control procedures around preparation and review of the schedule of expenditures of federal awards and implement an independent review of the ALN numbers per the grant agreements in the initial review of the SEFA.
Federal Agency: U.S. Department of Education Federal Programs: Special Education Cluster (IDEA) Assistance Listing Numbers: 84.027 and 84.173 Federal Award Identification Numbers and Year: H027A230054-23 and H173A230057-23 Pass-Through Agency: State of Rhode Island Department of Elementary and Secondary Education Pass-Through Numbers: 272513202-401, 272513502-401, 487250702-201 and 487251002-201 Award Period: July 1, 2023 – September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Recipients are expected to comply with suspension and debarment standards set out in 2 CFR 200.303. Condition: For 6 of 6 procurement transaction selected for testing, the School Department could not provide appropriate written documentation that suspension and debarment policies and procedures were followed. Questioned Costs: None Cause: The School Department has policies and procedures for obtaining appropriate written documentation that vendors are not suspended or debarred, but these procedures were not retrospectively applied to grant funded contracts entered into before the policies were implemented. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that the City retrospectively apply procedures to grant funded contracts entered into before policies were implemented to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management concurs with this finding.
Federal Agency: U.S. Department of Education Federal Programs: Special Education Cluster (IDEA) Assistance Listing Numbers: 84.027 and 84.173 Federal Award Identification Numbers and Year: H027A230054-23 and H173A230057-23 Pass-Through Agency: State of Rhode Island Department of Elementary and Secondary Education Pass-Through Numbers: 272513202-401, 272513502-401, 487250702-201 and 487251002-201 Award Period: July 1, 2023 – September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Recipients are expected to comply with suspension and debarment standards set out in 2 CFR 200.303. Condition: For 6 of 6 procurement transaction selected for testing, the School Department could not provide appropriate written documentation that suspension and debarment policies and procedures were followed. Questioned Costs: None Cause: The School Department has policies and procedures for obtaining appropriate written documentation that vendors are not suspended or debarred, but these procedures were not retrospectively applied to grant funded contracts entered into before the policies were implemented. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that the City retrospectively apply procedures to grant funded contracts entered into before policies were implemented to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management concurs with this finding.
Federal Agency: U.S. Department of Education Federal Programs: Special Education Cluster (IDEA) Assistance Listing Numbers: 84.027 and 84.173 Federal Award Identification Numbers and Year: H027A230054-23 and H173A230057-23 Pass-Through Agency: State of Rhode Island Department of Elementary and Secondary Education Pass-Through Numbers: 272513202-401, 272513502-401, 487250702-201 and 487251002-201 Award Period: July 1, 2023 – September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Recipients are expected to comply with suspension and debarment standards set out in 2 CFR 200.303. Condition: For 6 of 6 procurement transaction selected for testing, the School Department could not provide appropriate written documentation that suspension and debarment policies and procedures were followed. Questioned Costs: None Cause: The School Department has policies and procedures for obtaining appropriate written documentation that vendors are not suspended or debarred, but these procedures were not retrospectively applied to grant funded contracts entered into before the policies were implemented. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that the City retrospectively apply procedures to grant funded contracts entered into before policies were implemented to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management concurs with this finding.
Federal Agency: U.S. Department of Education Federal Programs: Special Education Cluster (IDEA) Assistance Listing Numbers: 84.027 and 84.173 Federal Award Identification Numbers and Year: H027A230054-23 and H173A230057-23 Pass-Through Agency: State of Rhode Island Department of Elementary and Secondary Education Pass-Through Numbers: 272513202-401, 272513502-401, 487250702-201 and 487251002-201 Award Period: July 1, 2023 – September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Recipients are expected to comply with suspension and debarment standards set out in 2 CFR 200.303. Condition: For 6 of 6 procurement transaction selected for testing, the School Department could not provide appropriate written documentation that suspension and debarment policies and procedures were followed. Questioned Costs: None Cause: The School Department has policies and procedures for obtaining appropriate written documentation that vendors are not suspended or debarred, but these procedures were not retrospectively applied to grant funded contracts entered into before the policies were implemented. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that the City retrospectively apply procedures to grant funded contracts entered into before policies were implemented to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management concurs with this finding.
NATIONAL INFRASTRUCTURE INVESTMENT – 20.933 Federal Awarding Agency: U.S. Department of Transportation (DOT), Federal Highway Administration (FHWA) Federal Award Fiscal Years: 2018 - 2024 Federal Award Numbers: NHPBLDG001, NHPBLDG002, IMO953115, NHPBLDG003, NHP0037015 Administered by: Rhode Island Department of Transportation (RIDOT) Compliance Requirement: Reporting FEDERAL REPORTING RIDOT lacks documentation of internal controls over the reporting requirements for National Infrastructure Investment (NII) Grants. Criteria: 2 CFR §200.303(a) states “Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: RIDOT’s internal controls relating to reporting requirements for NII Grants are not formalized in the manner required by statute, federal regulations, or professional standards (COSO, Green Book). There is no documentation of review and approval for submission of the Quarterly Project Progress Reports that are required by the grant awards. The Division of Performance Management, responsible for submission of the report, obtains verbal approval from the Director of Project Management prior to submission of the NII Grant report to FHWA. Consequently, submission approval and segregation of report preparation and approval/authorization control activities are not verifiable by examination. RIDOT’s current processes for NII Grant reporting are susceptible to misinterpretation, result in less assurance and accountability for report preparation and approval, and prevent the evaluation and monitoring of controls designed to ensure reporting accuracy. Cause: RIDOT lacks documentation of internal control that complies with Uniform Guidance requirements. Effect: Potential for errors in federal reporting submitted for the NII Grant program. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATIONS 2024-043a Enhance internal controls over the Reporting requirement by documenting policies, procedures and control activities in conformance with an internal control framework such as COSO or the Green Book. 2024-043b Document NII Grant report review and submission approval.
DRINKING WATER STATE REVOLVING FUND – 66.468 Federal Awarding Agency: Environmental Protection Agency (EPA) Federal Award Fiscal Years: 2022 - 2030 Federal Award Numbers: 99126120, 99126122, 99126E22, 99126S22, 99126L22, 99126123, 99126E23, 99126S23, 99126121, 99126L23 Pass-through Entity: Rhode Island Infrastructure Bank (RIIB) Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 - 2027 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirement: Allowable Costs/Cost Principles CONTROLS OVER ALLOCATION OF INDIRECT COSTS Controls are inadequate to ensure allocation of indirect costs is accurate, complete and in compliance with federal regulations. Background: RIDOH has constructed comprehensive workbooks, Uniform Grant Spreadsheets (UGS), to assist in monitoring award activity throughout the period of performance. Agency staff populate the UGS workbooks monthly with transactional information from the State’s accounting system. Accounting detail contained in the UGS are utilized to determine the indirect costs allocable to direct expenditures. Populating the spreadsheets is a manual process and lacks the required access, data integrity and other monitoring controls necessary to ensure the accuracy of the recording activity and subsequent calculations contained within. Criteria: Federal regulations 2 CFR §200.303 and 45 CFR §75.303 require the auditee to establish, document and maintain effective internal control over Federal awards that provides reasonable assurance the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Additionally, Federal regulation 2 CFR Part 200, Appendix VII specifically excludes capital expenditures as part of the direct expenditure base used in computing the indirect costs. Condition: Internal control over the allocation of indirect costs was insufficient to ensure compliance with federal regulations, specifically: • Indirect costs were erroneously applied to capital expenditures relating to improvements of the State’s Medical Examiner’s building, resulting in questioned costs of $160,132. • Data entry errors in the ELC Enhancing Detection award workbook resulted in the incorrect indirect cost rate applied retroactively to fiscal 2021. In considering total questioned costs, we calculated the impact of the incorrect indirect cost rate applied over the duration of the award to determine total questioned costs of $989,825. Cause: Current controls are not adequate (1) to detect the inclusion of unallowable costs within the indirect cost allocation calculation and (2) to ensure that the approved indirect cost rate is properly applied. The maintenance of the UGS monthly transactional detail is highly manual and lacks the data integrity controls to properly monitor for completeness, accuracy and required compliance with federal regulations. Effect: Reimbursement for unallowable indirect costs. Questioned Costs: $1,149,957 (ELC – 93.323) Valid Statistical Sampling: Not Applicable RECOMMENDATIONS 2024-045a Enhance internal controls over the UGS to ensure only allowable costs are included in the calculation of indirect costs and that only the approved indirect cost rate is applied. 2024-045b Credit the federal grantor for unallowable costs charged to the ELC grant award.
DRINKING WATER STATE REVOLVING FUND – 66.468 Federal Awarding Agency: Environmental Protection Agency (EPA) Federal Award Fiscal Years: 2022 - 2030 Federal Award Numbers: 99126120, 99126122, 99126E22, 99126S22, 99126L22, 99126123, 99126E23, 99126S23, 99126121, 99126L23 Pass-through Entity: Rhode Island Infrastructure Bank (RIIB) Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 - 2027 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirement: Allowable Costs/Cost Principles CONTROLS OVER ALLOCATION OF INDIRECT COSTS Controls are inadequate to ensure allocation of indirect costs is accurate, complete and in compliance with federal regulations. Background: RIDOH has constructed comprehensive workbooks, Uniform Grant Spreadsheets (UGS), to assist in monitoring award activity throughout the period of performance. Agency staff populate the UGS workbooks monthly with transactional information from the State’s accounting system. Accounting detail contained in the UGS are utilized to determine the indirect costs allocable to direct expenditures. Populating the spreadsheets is a manual process and lacks the required access, data integrity and other monitoring controls necessary to ensure the accuracy of the recording activity and subsequent calculations contained within. Criteria: Federal regulations 2 CFR §200.303 and 45 CFR §75.303 require the auditee to establish, document and maintain effective internal control over Federal awards that provides reasonable assurance the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Additionally, Federal regulation 2 CFR Part 200, Appendix VII specifically excludes capital expenditures as part of the direct expenditure base used in computing the indirect costs. Condition: Internal control over the allocation of indirect costs was insufficient to ensure compliance with federal regulations, specifically: • Indirect costs were erroneously applied to capital expenditures relating to improvements of the State’s Medical Examiner’s building, resulting in questioned costs of $160,132. • Data entry errors in the ELC Enhancing Detection award workbook resulted in the incorrect indirect cost rate applied retroactively to fiscal 2021. In considering total questioned costs, we calculated the impact of the incorrect indirect cost rate applied over the duration of the award to determine total questioned costs of $989,825. Cause: Current controls are not adequate (1) to detect the inclusion of unallowable costs within the indirect cost allocation calculation and (2) to ensure that the approved indirect cost rate is properly applied. The maintenance of the UGS monthly transactional detail is highly manual and lacks the data integrity controls to properly monitor for completeness, accuracy and required compliance with federal regulations. Effect: Reimbursement for unallowable indirect costs. Questioned Costs: $1,149,957 (ELC – 93.323) Valid Statistical Sampling: Not Applicable RECOMMENDATIONS 2024-045a Enhance internal controls over the UGS to ensure only allowable costs are included in the calculation of indirect costs and that only the approved indirect cost rate is applied. 2024-045b Credit the federal grantor for unallowable costs charged to the ELC grant award.
DRINKING WATER STATE REVOLVING FUND – 66.468 Federal Awarding Agency: Environmental Protection Agency (EPA) Federal Award Fiscal Years: 2022 - 2030 Federal Award Numbers: 99126120, 99126122, 99126E22, 99126S22, 99126L22, 99126123, 99126E23, 99126S23, 99126121, 99126L23 Pass-through Entity: Rhode Island Infrastructure Bank (RIIB) Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 - 2027 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirement: Allowable Costs/Cost Principles CONTROLS OVER ALLOCATION OF INDIRECT COSTS Controls are inadequate to ensure allocation of indirect costs is accurate, complete and in compliance with federal regulations. Background: RIDOH has constructed comprehensive workbooks, Uniform Grant Spreadsheets (UGS), to assist in monitoring award activity throughout the period of performance. Agency staff populate the UGS workbooks monthly with transactional information from the State’s accounting system. Accounting detail contained in the UGS are utilized to determine the indirect costs allocable to direct expenditures. Populating the spreadsheets is a manual process and lacks the required access, data integrity and other monitoring controls necessary to ensure the accuracy of the recording activity and subsequent calculations contained within. Criteria: Federal regulations 2 CFR §200.303 and 45 CFR §75.303 require the auditee to establish, document and maintain effective internal control over Federal awards that provides reasonable assurance the recipient is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Additionally, Federal regulation 2 CFR Part 200, Appendix VII specifically excludes capital expenditures as part of the direct expenditure base used in computing the indirect costs. Condition: Internal control over the allocation of indirect costs was insufficient to ensure compliance with federal regulations, specifically: • Indirect costs were erroneously applied to capital expenditures relating to improvements of the State’s Medical Examiner’s building, resulting in questioned costs of $160,132. • Data entry errors in the ELC Enhancing Detection award workbook resulted in the incorrect indirect cost rate applied retroactively to fiscal 2021. In considering total questioned costs, we calculated the impact of the incorrect indirect cost rate applied over the duration of the award to determine total questioned costs of $989,825. Cause: Current controls are not adequate (1) to detect the inclusion of unallowable costs within the indirect cost allocation calculation and (2) to ensure that the approved indirect cost rate is properly applied. The maintenance of the UGS monthly transactional detail is highly manual and lacks the data integrity controls to properly monitor for completeness, accuracy and required compliance with federal regulations. Effect: Reimbursement for unallowable indirect costs. Questioned Costs: $1,149,957 (ELC – 93.323) Valid Statistical Sampling: Not Applicable RECOMMENDATIONS 2024-045a Enhance internal controls over the UGS to ensure only allowable costs are included in the calculation of indirect costs and that only the approved indirect cost rate is applied. 2024-045b Credit the federal grantor for unallowable costs charged to the ELC grant award.
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES – 93.558 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS), Administration for Children and Families Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2301RITANF; 2401RITANF Administered by: Rhode Island Department of Human Services (DHS) Compliance Requirement: Special Tests and Provisions – Income Eligibility and Verification System INCOME ELIGIBILITY AND VERIFICATION SYSTEM Internal controls are lacking to ensure that Income Eligibility Verification System (IEVS) requirements are supported by documentation required by program regulations. Documentation deficiencies, specifically relating to executing data exchange interfaces, resulted in noncompliance with federal requirements for fiscal 2024. Background: RIBridges is the State’s federally approved computer system used to manage multiple health care and human service programs. It was designed to allow for integrated eligibility across programs, enhanced client accessibility, and provide for periodic validation of client attested data through multiple electronic interfaces. Criteria: 2 CFR §200.303 requires that a non-federal entity must “establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Federal regulation 45 CFR §205.55 requires that “each state shall participate in the Income Eligibility and Verification System (IEVS) required by Section 1137 of the Social Security Act as amended. Under the state plan the state is required to coordinate data exchanges with other federally assisted benefit programs, request and use income and benefit information when making eligibility determinations and adhere to standardized formats and procedures in exchanging information with other programs and agencies. Specifically, the state is required to request and obtain information as follows (42 USC 1320b-7; 45 CFR §205.55): (a.) Wage information from the state Wage Information Collection Agency (SWICA) should be obtained for all applicants at the first opportunity following receipt of the application, and for all recipients on a quarterly basis. (b.) Unemployment Compensation (UC) information should be obtained for all applicants at the first opportunity, and in each of the first three months in which the individual is receiving aid. This information should also be obtained in each of the first three months following any recipient-reported loss of employment. If an individual is found to be receiving UC, the information should be requested until benefits are exhausted. (c.) All available information from the Social Security Administration (SSA) for all applicants at the first opportunity. (d.) Information from the US Citizenship and Immigration Services and any other information from other agencies in the state or in other states that might provide income or other useful information. (e.) Unearned income from the Internal Revenue Service (IRS).” Condition: The Department of Human Services (DHS) did not outline within its TANF state plan how it complies with Section 1137 of the Social Security Act as amended as it relates to IEVS requirements. Furthermore, the case files reviewed in the RIBridges system lacked sufficient documentation to demonstrate that income data interfaces were consistently executed for certain cases tested. This raises concerns regarding the adequacy of verification processes and compliance with federal program integrity requirements. As part of our sample testing of 71 cases subject to IEVS requirements, we identified the following issues: • In 5 cases, SWICA data from the Rhode Island Department of Labor and Training was available; however, no actions were taken to verify or incorporate this information into the benefit calculation process. • In 5 cases, none of the required IEVS data interfaces had been executed or documented in the case files. • In 21 cases, the IRS data interface was either not executed or reflected outdated information. • In 9 cases, the SSA data interface was either not executed or reflected outdated information. Cause: Absence of IEVS procedures documented within the TANF state plan. Lack of supporting documentation in the case record and insufficient procedures to ensure that income interfaces are run against client information prior to and during eligibility periods. Effect: Noncompliance with TANF IEVS requirements mandated by federal regulations. Improper or incorrect benefit payments could be claimed to the TANF program. Questioned Costs: Undetermined Valid Statistical Sample: Yes RECOMMENDATIONS 2024-050a Conduct a review of the TANF state plan and update it to include detailed procedures for utilizing IEVS interfaces and incorporating the resulting information into eligibility determinations. 2024-050b Ensure that income data interfaces are properly executed and that the information obtained is used in making benefit eligibility determinations.
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES – 93.558 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS), Administration for Children and Families Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2301RITANF; 2401RITANF Administered by: Rhode Island Department of Human Services (DHS) Compliance Requirement: Special Tests and Provisions – Income Eligibility and Verification System INCOME ELIGIBILITY AND VERIFICATION SYSTEM Internal controls are lacking to ensure that Income Eligibility Verification System (IEVS) requirements are supported by documentation required by program regulations. Documentation deficiencies, specifically relating to executing data exchange interfaces, resulted in noncompliance with federal requirements for fiscal 2024. Background: RIBridges is the State’s federally approved computer system used to manage multiple health care and human service programs. It was designed to allow for integrated eligibility across programs, enhanced client accessibility, and provide for periodic validation of client attested data through multiple electronic interfaces. Criteria: 2 CFR §200.303 requires that a non-federal entity must “establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Federal regulation 45 CFR §205.55 requires that “each state shall participate in the Income Eligibility and Verification System (IEVS) required by Section 1137 of the Social Security Act as amended. Under the state plan the state is required to coordinate data exchanges with other federally assisted benefit programs, request and use income and benefit information when making eligibility determinations and adhere to standardized formats and procedures in exchanging information with other programs and agencies. Specifically, the state is required to request and obtain information as follows (42 USC 1320b-7; 45 CFR §205.55): (a.) Wage information from the state Wage Information Collection Agency (SWICA) should be obtained for all applicants at the first opportunity following receipt of the application, and for all recipients on a quarterly basis. (b.) Unemployment Compensation (UC) information should be obtained for all applicants at the first opportunity, and in each of the first three months in which the individual is receiving aid. This information should also be obtained in each of the first three months following any recipient-reported loss of employment. If an individual is found to be receiving UC, the information should be requested until benefits are exhausted. (c.) All available information from the Social Security Administration (SSA) for all applicants at the first opportunity. (d.) Information from the US Citizenship and Immigration Services and any other information from other agencies in the state or in other states that might provide income or other useful information. (e.) Unearned income from the Internal Revenue Service (IRS).” Condition: The Department of Human Services (DHS) did not outline within its TANF state plan how it complies with Section 1137 of the Social Security Act as amended as it relates to IEVS requirements. Furthermore, the case files reviewed in the RIBridges system lacked sufficient documentation to demonstrate that income data interfaces were consistently executed for certain cases tested. This raises concerns regarding the adequacy of verification processes and compliance with federal program integrity requirements. As part of our sample testing of 71 cases subject to IEVS requirements, we identified the following issues: • In 5 cases, SWICA data from the Rhode Island Department of Labor and Training was available; however, no actions were taken to verify or incorporate this information into the benefit calculation process. • In 5 cases, none of the required IEVS data interfaces had been executed or documented in the case files. • In 21 cases, the IRS data interface was either not executed or reflected outdated information. • In 9 cases, the SSA data interface was either not executed or reflected outdated information. Cause: Absence of IEVS procedures documented within the TANF state plan. Lack of supporting documentation in the case record and insufficient procedures to ensure that income interfaces are run against client information prior to and during eligibility periods. Effect: Noncompliance with TANF IEVS requirements mandated by federal regulations. Improper or incorrect benefit payments could be claimed to the TANF program. Questioned Costs: Undetermined Valid Statistical Sample: Yes RECOMMENDATIONS 2024-050a Conduct a review of the TANF state plan and update it to include detailed procedures for utilizing IEVS interfaces and incorporating the resulting information into eligibility determinations. 2024-050b Ensure that income data interfaces are properly executed and that the information obtained is used in making benefit eligibility determinations.
CHILDREN’S HEALTH INSURANCE PROGRAM – 93.767 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5021, 2305RI3002; 2405RI5021 Administered by: Executive Office of Health and Human Services (EOHHS) MEDICAID CLUSTER – 93.775, 93.777, 93.778 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5MAP; 2405RI5MAP Administered by: Executive Office of Health and Human Services (EOHHS) Compliance Requirement: Allowable Costs/Cost Principles CONTROLS OVER SPECIAL EDUCATION SERVICES PROVIDED BY LOCAL EDUCATION AGENCIES The Executive Office of Health and Human Services (EOHHS) needs to formalize and document internal control procedures to ensure local education agency (LEA) compliance with Medicaid requirements relating to the allowability of special education services. Criteria: 2 CFR §200.303 Internal controls, requires the State to “(a) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award, (c) evaluate and monitor the recipient's or subrecipient's compliance with statutes, regulations, and the terms and conditions of Federal awards, and (d) take prompt action when instances of noncompliance are identified.” Condition: EOHHS did not conduct periodic site visits to LEAs during fiscal 2024. EOHHS has well established policies and procedures relating to its oversight of special education services which are detailed in Direct and Administrative Services Guidebooks for LEAs. Without periodic site visits or other documented control procedures designed to ensure local education agency compliance with the Medicaid policies and procedures that define the requirements for the allowability of special education services, internal controls are currently lacking over compliance in this area. In formalizing internal controls, EOHHS will be able to define the appropriate amount of oversight needed to ensure compliance with requirements for LEA special education services. Cause: Lack of documented internal controls over LEA direct and administrative claiming. Effect: Potential noncompliance with federal regulations regarding the allowability of special education services reimbursed by Medicaid. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-063 Document and implement internal controls to ensure the allowability of special education services for reimbursement by Medicaid.
CHILDREN’S HEALTH INSURANCE PROGRAM – 93.767 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5021, 2305RI3002; 2405RI5021 Administered by: Executive Office of Health and Human Services (EOHHS) MEDICAID CLUSTER – 93.775, 93.777, 93.778 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5MAP; 2405RI5MAP Administered by: Executive Office of Health and Human Services (EOHHS) Compliance Requirement: Allowable Costs/Cost Principles CONTROLS OVER SPECIAL EDUCATION SERVICES PROVIDED BY LOCAL EDUCATION AGENCIES The Executive Office of Health and Human Services (EOHHS) needs to formalize and document internal control procedures to ensure local education agency (LEA) compliance with Medicaid requirements relating to the allowability of special education services. Criteria: 2 CFR §200.303 Internal controls, requires the State to “(a) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award, (c) evaluate and monitor the recipient's or subrecipient's compliance with statutes, regulations, and the terms and conditions of Federal awards, and (d) take prompt action when instances of noncompliance are identified.” Condition: EOHHS did not conduct periodic site visits to LEAs during fiscal 2024. EOHHS has well established policies and procedures relating to its oversight of special education services which are detailed in Direct and Administrative Services Guidebooks for LEAs. Without periodic site visits or other documented control procedures designed to ensure local education agency compliance with the Medicaid policies and procedures that define the requirements for the allowability of special education services, internal controls are currently lacking over compliance in this area. In formalizing internal controls, EOHHS will be able to define the appropriate amount of oversight needed to ensure compliance with requirements for LEA special education services. Cause: Lack of documented internal controls over LEA direct and administrative claiming. Effect: Potential noncompliance with federal regulations regarding the allowability of special education services reimbursed by Medicaid. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-063 Document and implement internal controls to ensure the allowability of special education services for reimbursement by Medicaid.
CHILDREN’S HEALTH INSURANCE PROGRAM – 93.767 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5021, 2305RI3002; 2405RI5021 Administered by: Executive Office of Health and Human Services (EOHHS) MEDICAID CLUSTER – 93.775, 93.777, 93.778 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5MAP; 2405RI5MAP Administered by: Executive Office of Health and Human Services (EOHHS) Compliance Requirement: Allowable Costs/Cost Principles CONTROLS OVER SPECIAL EDUCATION SERVICES PROVIDED BY LOCAL EDUCATION AGENCIES The Executive Office of Health and Human Services (EOHHS) needs to formalize and document internal control procedures to ensure local education agency (LEA) compliance with Medicaid requirements relating to the allowability of special education services. Criteria: 2 CFR §200.303 Internal controls, requires the State to “(a) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award, (c) evaluate and monitor the recipient's or subrecipient's compliance with statutes, regulations, and the terms and conditions of Federal awards, and (d) take prompt action when instances of noncompliance are identified.” Condition: EOHHS did not conduct periodic site visits to LEAs during fiscal 2024. EOHHS has well established policies and procedures relating to its oversight of special education services which are detailed in Direct and Administrative Services Guidebooks for LEAs. Without periodic site visits or other documented control procedures designed to ensure local education agency compliance with the Medicaid policies and procedures that define the requirements for the allowability of special education services, internal controls are currently lacking over compliance in this area. In formalizing internal controls, EOHHS will be able to define the appropriate amount of oversight needed to ensure compliance with requirements for LEA special education services. Cause: Lack of documented internal controls over LEA direct and administrative claiming. Effect: Potential noncompliance with federal regulations regarding the allowability of special education services reimbursed by Medicaid. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-063 Document and implement internal controls to ensure the allowability of special education services for reimbursement by Medicaid.
CHILDREN’S HEALTH INSURANCE PROGRAM – 93.767 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5021, 2305RI3002; 2405RI5021 Administered by: Executive Office of Health and Human Services (EOHHS) MEDICAID CLUSTER – 93.775, 93.777, 93.778 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2023; 2024 Federal Award Number: 2305RI5MAP; 2405RI5MAP Administered by: Executive Office of Health and Human Services (EOHHS) Compliance Requirement: Allowable Costs/Cost Principles CONTROLS OVER SPECIAL EDUCATION SERVICES PROVIDED BY LOCAL EDUCATION AGENCIES The Executive Office of Health and Human Services (EOHHS) needs to formalize and document internal control procedures to ensure local education agency (LEA) compliance with Medicaid requirements relating to the allowability of special education services. Criteria: 2 CFR §200.303 Internal controls, requires the State to “(a) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal award, (c) evaluate and monitor the recipient's or subrecipient's compliance with statutes, regulations, and the terms and conditions of Federal awards, and (d) take prompt action when instances of noncompliance are identified.” Condition: EOHHS did not conduct periodic site visits to LEAs during fiscal 2024. EOHHS has well established policies and procedures relating to its oversight of special education services which are detailed in Direct and Administrative Services Guidebooks for LEAs. Without periodic site visits or other documented control procedures designed to ensure local education agency compliance with the Medicaid policies and procedures that define the requirements for the allowability of special education services, internal controls are currently lacking over compliance in this area. In formalizing internal controls, EOHHS will be able to define the appropriate amount of oversight needed to ensure compliance with requirements for LEA special education services. Cause: Lack of documented internal controls over LEA direct and administrative claiming. Effect: Potential noncompliance with federal regulations regarding the allowability of special education services reimbursed by Medicaid. Questioned Costs: None Valid Statistical Sampling: Not Applicable RECOMMENDATION 2024-063 Document and implement internal controls to ensure the allowability of special education services for reimbursement by Medicaid.
2024-019 The Department of Commerce did not have adequate internal controls to ensure payments to subrecipients were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: SLFRP0002 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Activities Allowed or Unallowed Allowable Costs/Cost Principles Period of Performance Known Questioned Cost Amount: None Prior Year Audit Finding: Yes, Finding 2023-027 Background The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), as part of the America Rescue Plan Act of 2021, delivered $350 billion to state, local and tribal governments to support the response to and recovery from the COVID-19 public health emergency. Washington received $4.4 billion of SLFRF money from the U.S. Department of the Treasury, which the state’s Office of Financial Management allocated to state agencies for various programs. In fiscal year 2024, state agencies spent about $564 million in SLFRF funds, more than $102 million of which was spent by the Department of Commerce. The Department primarily used SLFRF funds to administer and support affordable housing construction and infrastructure projects including broadband infrastructure, through its housing and local government divisions. SLFRF funds were also used for transportation, tourism and other pandemic-recovery projects. During fiscal year 2024, the Department expended about $100 million on reimbursements to local governments and nonprofit organizations as subrecipients. These subrecipients were responsible for carrying out housing and infrastructure projects under contracts with the Department. Pass-through entities are required to monitor the activities of subrecipients to ensure they are properly using federal funds for allowable activities and expenditures. Federal regulations recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In the prior audit, we reported the Department did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported and met period of performance requirements for the Coronavirus State and Local Fiscal Recovery Funds. The prior finding numbers were 2023-027, 2023-028 and 2022-019. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements for monitoring subrecipients to ensure payments were allowable, properly supported and met period of performance requirements for the SLFRF. During the audit, we were unable to perform procedures to ascertain whether the Department established and followed internal controls to ensure compliance with program requirements. As such, we determined internal controls were inadequate to prevent or detect material noncompliance with federal requirements for allowable activities and period of performance. We consider these internal control deficiencies to be a material weakness. Cause of Condition The Department did not identify its internal controls that are designed to ensure compliance with activities allowed, cost principles and period of performance requirements. Therefore, we were unable to assess the adequacy of internal controls over expenditures reimbursed to subrecipients to determine the Department’s compliance with these compliance requirements. Effect of Condition Without establishing adequate internal controls, the Department cannot reasonably ensure it and its subrecipients are using federal funds for allowable purposes and that spending occurs within the allowed period of performance. Recommendation We recommend the Department establish and document internal controls sufficient to prevent and detect noncompliance with the allowable costs and cost principles and period of performance requirements. Department’s Response The Department received a significant amount of SLFRF funding which was issued largely by proviso to various programs. The programs who received funding operated on their own internal control structures based on the guidance in place at the time and provided to them as part of their proviso. The programs audited in the prior year were not audited again in the current audit so any deficiencies reported in the prior year are not tied to the programs reported in this finding. The Department does have significant controls in place for activities allowed or unallowed, allowable costs/cost principles and period of performance. The Washington State Auditor’s Office (SAO) starting the planning for this audit in late in the audit cycle in October 2024 and on November 1, 2024 the Internal Control Officer met with the Assistant Audit Manager to confirm two programs would be audited for the SLFRF audit. Internal Control Office (ICO) staff met with program staff to document their internal control processes. Less than a week later SAO changed their audit scope and added three more separate programs, two with different internal control structures. SAO required receipt of internal controls in writing which Commerce was able to fulfill for three of the programs, however, since the SAO was late in completing the planning, scoping and start of the audit, Commerce leadership made the decision to bypass the internal control work confirmation. It is important to note that the Code of Federal Regulation was updated in 2024 that starting on October 1, 2024 internal controls were required to be documented. That code did not apply to these programs as their award start was in 2023, yet SAO required key controls to be documented. The Department supports that the programs audited had established controls that were in place and working effectively and that three of the five program controls were documented prior to the request made by the auditor. The SAO is not able to meet the Federal Audit Clearinghouse deadline for this audit, however, the Department was given a very short window in which to complete an audit of five different internal programs. It is our hope that all future audits are started within in timeframe early enough to allow staff to appropriately fill all audit requests and provide documentation to support the mission of the audit. Auditor’s Remarks Our Office began scoping the audit of the SLFRF program in October 2024 after receiving the Schedule of Expenditures of Federal Awards from the Office of Financial Management (OFM). Once we performed our analysis of program expenditures at the Department, we submitted requests for audit contacts from two of the divisions administering SLFRF funds on October 3, 2024. We finalized preliminary scoping for the audit on October 16th and followed up with the Department by requesting audit contacts for three additional projects funded by SLFRF. The Department ultimately provided enough information for us to scope and finalize the audit plan in January 2025. In our judgment, we provided the Department with ample time to provide documentation about its internal controls over the direct and material compliance requirements for the SLFRF that were in place during the audit period. We discussed the timing of the audit with Department management, and they decided to forego our Office testing the internal controls over all of the compliance requirements. We agree with the Department that Uniform Guidance (2 CFR) did not require non-Federal entities that receive federal funds to explicitly have documentation of their internal controls. However, the version of 2 CFR 200.303 Internal controls (effective November 12, 2020) in place during the audit period required non-Federal entities to 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. The State Administrative and Accounting Manual (SAAM), published by OFM, establishes the minimum requirements that state agencies must meet. Chapter 20 of the SAAM discusses policies related to internal controls. Section 20.15.60.d states: Documentation is a necessary part of a system of internal control. Management must determine the level and nature of documentation that is needed to assess the effectiveness of internal control. Documentation should be sufficient to allow the agency to: • Assess the overall soundness of the system of internal control. • Be aware of the existence of internal control weaknesses, if any. • Formulate the agency’s plan of action for addressing internal control weaknesses and improving the internal control where necessary. While we appreciate the Department’s Internal Control Office assisting its programs with documenting its internal controls and believe it will help strengthen the Department in future years, it was evident this documentation did not exist at its program levels during the audit period. Regarding the timing of our single audit opinion for the state, our engagement letter with OFM stipulates that the single audit report will be issued no later than April 30, 2025 and this letter was signed by both parties in June 2024. Our audit work was completed in accordance with the timelines outlined in this engagement letter. We reaffirm our audit finding and will review the status of the Department’s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 403, Factors affecting allowability of costs, describes the general criteria in order for a cost to be allowable under federal awards, including being adequately documented. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11.
2024-020 The Department of Commerce did not have adequate internal controls to ensure compliance with suspension and debarment requirements for the Coronavirus State and Local Fiscal Recovery Funds. Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: SLFRFP0002 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Suspension and Debarment Known Questioned Cost Amount: None Prior Year Audit Finding: No Background The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), as part of the America Rescue Plan Act of 2021, delivered $350 billion to state, local and tribal governments to support the response to and recovery from the COVID-19 public health emergency. Washington received $4.4 billion of SLFRF from the U.S. Department of the Treasury, which the state’s Office of Financial Management allocated to state agencies for various programs. In fiscal year 2024, state agencies spent about $564 million in SLFRF, more than $102 million of which the Department of Commerce spent. The Department primarily used SLFRF to administer and support affordable housing construction and infrastructure projects including broadband infrastructure, through its housing and local government divisions. SLFRF were also used for transportation, tourism and other pandemic-recovery projects. During fiscal year 2024, the Department expended about $100 million on reimbursements to local governments and nonprofit organizations as subrecipients. These subrecipients were responsible for carrying out housing and infrastructure projects under contracts with the Department. Federal regulations prohibit grant recipients from contracting with or making subawards to parties that are suspended or debarred. The grantee must verify that all contractors and subrecipients receiving $25,000 or more in federal funds have not been suspended, debarred or otherwise excluded. They may verify this by obtaining a written certification from the contractor or subrecipient or inserting a clause into the contract where the contractor or subrecipient states it is not suspended or debarred. Alternatively, the grantee may search the federal System for Award Management at SAM.gov to verify the contractor’s or subrecipient’s suspension and debarment status. This requirement must be met before entering into the contract. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. Description of Condition The Department did not have adequate internal controls to ensure compliance with suspension and debarment requirements for the SLFRF. During the audit, we were unable to perform procedures to ascertain whether the Department established and followed internal controls to ensure compliance with program requirements. As such, we determined internal controls were inadequate to prevent or detect material noncompliance with federal requirements for suspension and debarment. We consider these internal control deficiencies to be a material weakness. This issue was not reported as a finding in the prior audit. Cause of Condition The Department did not identify its internal controls that are designed to ensure compliance with suspension and debarment requirements. Therefore, we were unable to assess the adequacy of internal controls over suspension and debarment to determine the Department’s compliance with the compliance requirement. Effect of Condition Without establishing adequate internal controls, the Department cannot reasonably ensure its subrecipients are not suspended or debarred from receiving or participating in federal awards. Recommendation We recommend the Department establish and document internal controls sufficient to prevent and detect noncompliance with the suspension and debarment requirements. Department’s Response The Department maintained effective internal controls over the SLFRF-funded programs audited, despite late audit planning and an expanded scope introduced by the Washington State Auditor’s Office (SAO). The Department operated within applicable federal regulations in place at the time of the awards and ensured that controls were functioning as required. Each program receiving SLFRF funding was subject to its own internal control structure, aligned with specific program requirements and proviso guidance. The programs audited this year were distinct from those audited in the prior year, and as such, any deficiencies previously reported are unrelated to the programs referenced in the current finding. The Department confirms that appropriate subrecipient monitoring controls were in place and operating effectively for all programs included in this year’s audit. Challenges arose due to SAO initiating audit planning late in the cycle, beginning in October 2023. At the outset, only two programs were identified for audit, and internal control documentation for these programs was prepared accordingly. However, within a week, SAO expanded the audit scope to include three additional programs, two of which followed different internal control frameworks. Commerce responded promptly, providing documentation for three of the five programs. Due to time constraints caused by the late scoping and planning of the audit, Commerce leadership prioritized core audit deliverables and elected not to pursue additional internal control confirmations at that time. It is important to note that a 2024 update to the Code of Federal Regulations requires documented internal controls for awards beginning on or after October 1, 2024. The programs audited, however, were awarded in 2023 and were therefore not subject to this requirement. Despite this, SAO reported the absence of certain documented key controls as a deficiency. The Department maintains that all audited programs had established and effective internal controls over suspension and debarment requirements. All Department contract templates include a suspension and debarment clause that when signed, confirms the contractor is not suspended or debarred from receiving federal funds. This clause meets the standard required in the Code of Federal Regulations. The past several audits completed by the SAO and other entities have concluded this control to be in place and working effectively. While the SAO will not meet the Federal Audit Clearinghouse deadline due to delays in initiating and planning this audit, the Department worked within a compressed timeline to accommodate the widened audit scope. Looking ahead, the Department recommends that future audits be initiated earlier to provide sufficient time for staff to meet all audit requirements and fully support the audit’s objectives. Auditor’s Remarks Our Office began scoping the audit of the SLFRF program in October 2024 after receiving the Schedule of Expenditures of Federal Awards from the Office of Financial Management (OFM). Once we performed our analysis of program expenditures at the Department, we submitted requests for audit contacts from two of the divisions administering SLFRF funds on October 3, 2024. We finalized preliminary scoping for the audit on October 16th and followed up with the Department by requesting audit contacts for three additional projects funded by SLFRF. The Department ultimately provided enough information for us to scope and finalize the audit plan in January 2025. In our judgment, we provided the Department with ample time to provide documentation about its internal controls over the direct and material compliance requirements for the SLFRF that were in place during the audit period. We discussed the timing of the audit with Department management, and they decided to forego our Office testing the internal controls over all of the compliance requirements. We agree with the Department that Uniform Guidance (2 CFR) did not require non-Federal entities that receive federal funds to explicitly have documentation of their internal controls. However, the version of 2 CFR 200.303 Internal controls (effective November 12, 2020) in place during the audit period required non-Federal entities to 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. The State Administrative and Accounting Manual (SAAM), published by OFM, establishes the minimum requirements that state agencies must meet. Chapter 20 of the SAAM discusses policies related to internal controls. Section 20.15.60.d states: Documentation is a necessary part of a system of internal control. Management must determine the level and nature of documentation that is needed to assess the effectiveness of internal control. Documentation should be sufficient to allow the agency to: • Assess the overall soundness of the system of internal control. • Be aware of the existence of internal control weaknesses, if any. • Formulate the agency’s plan of action for addressing internal control weaknesses and improving the internal control where necessary. While we appreciate the Department’s Internal Control Office assisting its programs with documenting its internal controls and believe it will help strengthen the Department in future years, it was evident this documentation did not exist at its program levels during the audit period. Regarding the timing of our single audit opinion for the state, our engagement letter with OFM stipulates that the single audit report will be issued no later than April 30, 2025 and this letter was signed by both parties in June 2024. Our audit work was completed in accordance with the timelines outlined in this engagement letter. We reaffirm our audit finding and will review the status of the Department’s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 180, OMB Guidelines on Agencies on Government Wide Debarment and Suspension (Nonprocurement) establishes non-procurement debarment and suspension regulations.
2024-022 The Department of Commerce did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the Coronavirus State and Local Fiscal Recovery Funds. Assistance Listing Number and Title: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Grantor Name: U.S. Department of the Treasury Federal Award/Contract Number: SLFRP0002 Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Subrecipient Monitoring Known Questioned Cost Amount: None Prior Year Audit Finding: Yes, Finding 2023-031 Background The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), as part of the America Rescue Plan Act of 2021, delivered $350 billion to state, local and tribal governments to support the response to and recovery from the COVID-19 public health emergency. Washington received $4.4 billion of SLFRF money from the U.S. Department of the Treasury, which the state’s Office of Financial Management allocated to state agencies for various programs. In fiscal year 2024, state agencies spent about $564 million in SLFRF funds, more than $102 million of which was spent by the Department of Commerce. The Department primarily used SLFRF funds to administer and support affordable housing construction and infrastructure projects including broadband infrastructure, through its housing and local government divisions. SLFRF funds were also used for transportation, tourism and other pandemic-recovery projects. During fiscal year 2024, the Department expended about $100 million on reimbursements to local governments and nonprofit organizations as subrecipients. These subrecipients were responsible for carrying out housing and infrastructure projects under contracts with the Department. Pass-through entities are required to monitor the activities of subrecipients to ensure they are properly using federal funds for allowable activities and expenditures. Federal regulations require recipients to establish and follow internal controls to ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. In prior audits, we reported the Department did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients for the SLFRF. The prior finding numbers were 2023-031 and 2022-021. Description of Condition The Department did not have adequate internal controls over and did not comply with requirements to perform risk assessments for subrecipients of the SLFRF. During the audit, we were unable to perform procedures to ascertain whether the Department established and followed internal controls to ensure compliance with program requirements. As such, we determined internal controls were inadequate to prevent or detect material noncompliance with federal requirements for subrecipient monitoring. During the audit period, the Department awarded more than $68 million in SLFRF funds to 25 subrecipients for the five SLFRF funded programs we examined. We randomly selected and examined eight subrecipients in addition to one individually significant subrecipient and determined the Department did not perform a risk assessment to determine the appropriate level of monitoring for two of its subrecipients (22 percent). We consider these internal control deficiencies to be a material weakness, which led to material noncompliance. Cause of Condition The Department did not identify its internal controls that are designed to ensure compliance with subrecipient monitoring requirements. Therefore, we were unable to assess the adequacy of internal controls over subrecipient monitoring to determine the Department’s compliance with these compliance requirements. Program management was not aware of the requirement to perform and document risk assessments of each of its subrecipients. Effect of Condition Without establishing adequate internal controls, the Department cannot reasonably ensure it is adequately monitoring subrecipients for all requirements placed on the pass-through entity. Without performing risk assessments of subrecipients that received SLFRF funding, which the federal government has classified as a program of higher risk, the Department cannot determine the appropriate amount of monitoring required for each subrecipient. Not performing new risk assessments also makes the Department less likely to detect subrecipients’ noncompliance with federal regulations and the terms and conditions of subawards. Recommendation We recommend the Department: • Establish and document internal controls sufficient to prevent and detect noncompliance with subrecipient monitoring requirements. • Ensure it performs and documents the required risk assessments sufficiently for management to evaluate the results, determine the appropriate level of monitoring, and demonstrate compliance with federal requirements. Department’s Response The Department maintained effective internal controls over the SLFRF-funded programs audited, despite late audit planning and an expanded scope introduced by the Washington State Auditor’s Office (SAO). The Department operated within applicable federal regulations in place at the time of the awards and ensured that controls were functioning as required. Each program receiving SLFRF funding was subject to its own internal control structure, aligned with specific program requirements and proviso guidance. The programs audited this year were distinct from those audited in the prior year, and as such, any deficiencies previously reported are unrelated to the programs referenced in the current finding. The Department confirms that appropriate subrecipient monitoring controls were in place and operating effectively for all programs included in this year’s audit. Challenges arose due to SAO initiating audit planning late in the cycle, beginning in October 2023. At the outset, only two programs were identified for audit, and internal control documentation for these programs was prepared accordingly. However, within a week, SAO expanded the audit scope to include three additional programs, two of which followed different internal control frameworks. Commerce responded promptly, providing documentation for three of the five programs. Due to time constraints caused by the late scoping and planning of the audit, Commerce leadership prioritized core audit deliverables and elected not to pursue additional internal control confirmations at that time. It is important to note that a 2024 update to the Code of Federal Regulations requires documented internal controls for awards beginning on or after October 1, 2024. The programs audited, however, were awarded in 2023 and were therefore not subject to this requirement. Despite this, SAO reported the absence of certain documented key controls as a deficiency. The Department maintains that all audited programs had established and effective internal controls and that documentation was completed for a majority of programs prior to SAO’s request. While the SAO will not meet the Federal Audit Clearinghouse deadline due to delays in initiating and planning this audit, the Department worked within a compressed timeline to accommodate the widened audit scope. Looking ahead, the Department recommends that future audits be initiated earlier to provide sufficient time for staff to meet all audit requirements and fully support the audit’s objectives. Auditor’s Remarks Our Office began scoping the audit of the SLFRF program in October 2024 after receiving the Schedule of Expenditures of Federal Awards from the Office of Financial Management (OFM). Once we performed our analysis of program expenditures at the Department, we submitted requests for audit contacts from two of the divisions administering SLFRF funds on October 3, 2024. We finalized preliminary scoping for the audit on October 16th and followed up with the Department by requesting audit contacts for three additional projects funded by SLFRF. The Department ultimately provided enough information for us to scope and finalize the audit plan in January 2025. In our judgment, we provided the Department with ample time to provide documentation about its internal controls over the direct and material compliance requirements for the SLFRF that were in place during the audit period. We discussed the timing of the audit with Department management, and they decided to forego our Office testing the internal controls over all of the compliance requirements. We agree with the Department that Uniform Guidance (2 CFR) did not require non-Federal entities that receive federal funds to explicitly have documentation of their internal controls. However, the version of 2 CFR 200.303 Internal controls (effective November 12, 2020) in place during the audit period required non-Federal entities to 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. The State Administrative and Accounting Manual (SAAM), published by OFM, establishes the minimum requirements that state agencies must meet. Chapter 20 of the SAAM discusses policies related to internal controls. Section 20.15.60.d states: Documentation is a necessary part of a system of internal control. Management must determine the level and nature of documentation that is needed to assess the effectiveness of internal control. Documentation should be sufficient to allow the agency to: • Assess the overall soundness of the system of internal control. • Be aware of the existence of internal control weaknesses, if any. • Formulate the agency’s plan of action for addressing internal control weaknesses and improving the internal control where necessary. While we appreciate the Department’s Internal Control Office assisting its programs with documenting its internal controls and believe it will help strengthen the Department in future years, it was evident this documentation did not exist at its program levels during the audit period. Regarding the timing of our single audit opinion for the state, our engagement letter with OFM stipulates that the single audit report will be issued no later than April 30, 2025 and this letter was signed by both parties in June 2024. Our audit work was completed in accordance with the timelines outlined in this engagement letter. We reaffirm our audit finding and will review the status of the Department’s corrective action during our next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 332, Requirements for pass-through entities, establishes the requirements for all pass-through entities.