Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-007 Programs: All Material Weakness over Schedule of Expenditures of Federal Awards (SEFA) Reporting Repeat Finding: Yes; 2023-006 Condition: Finance is responsible for preparing the schedule of expenditures of Federal awards based upon grant information obtained from the financial accounting records and other information provided by each department or agency. In many instances, the detail expenditure information in the accounting software differed from the expenditures reported by various City departments. Additionally, expenditures related to sub-recipients, subcontractors, and beneficiaries are not adequately tracked in the general ledger. Criteria: In accordance with 2 CFR 200.303, Internal controls: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR 200.508, Auditee responsibilities: The auditee must: (b) Prepare appropriate financial statements, including the schedule of expenditures of Federal awards in accordance with §200.510 Financial statements. In accordance with 2 CFR 200.510, Financial statements: (b) Schedule of expenditures of Federal awards: the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. For a cluster of programs, also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total federal awards expended for loan or loan guarantee programs in the schedule; and (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the non-Federal entity elected to use the 10% de minimis cost rate as covered in §200.414 Indirect (F&A) costs. Cause: The City does not maintain a centralized grant accounting function or standardized policies and procedures, including requirements to periodically submit and reconcile expenditures; instead, each department maintains its own grant information. The lack of submission of grant documents and accurate information by the various agencies and departments to Finance weakens internal controls over grant reporting and hinders the ability of Finance to accurately prepare the Schedule. Internal controls over financial reporting should be designed to prevent, detect or correct errors in a timely manner. Without adequate controls, the City cannot provide reasonable assurance that the Schedule is fairly presented. Controls have not been established by the City to ensure complete and accurate reporting for the Schedule for the 2024 fiscal year. Effect: The determination of which major programs will be audited is affected by the accuracy of the Schedule at the time of audit. Without proper internal controls over financial reporting, inaccurate reporting of the City’s financial information could occur, and the City cannot provide reasonable assurance that the SEFA is fairly presented. As a result, individual program reports throughout the year could have inaccurate information. There were also significant delays in the preparation of the Schedule of Federal awards, which prevented the City from meeting the March 31, 2025 deadline with the Federal clearinghouse. Questioned Costs: Unknown. Recommendation: We recommend that Finance establish policies and procedures to ensure that the Federal funds are properly identified and reported accurately in the Schedule in accordance with Uniform Guidance requirements. We also recommend that individuals responsible for administering Federal assistance programs with the City receive training in grant administration. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
Finding 2024-015 U.S. Department of Treasury AL No. 21.027 American Rescue Plan Act Material Weakness in Internal Controls and Noncompliance over Subrecipient Monitoring Repeat Finding: No Condition: For 12 out of 40, the unique entity identifier (UEI) was not included in the grant agreement. For 12 out of 40, the Federal Award Identification Number (FAIN) was not included in the grant agreement. For 4 out of 40 selections, the UEI was incorrect on the grant agreement. Criteria: In accordance with 2 CFR §200.303: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR §25.300: (a) A recipient may not make a subaward to a subrecipient unless that subrecipient has obtained and provided to the recipient a unique entity identifier. Subrecipients are not required to complete full SAM registration to obtain a unique entity identifier. (b) A recipient must notify any potential subrecipients that the recipient cannot make a subaward unless the subrecipient has obtained a unique entity identifier as described in paragraph (a) of this section. According to 2 CFR §200.332, all pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the Federal award identification including the subrecipient's unique entity identifier, Federal Award Identification Number (FAIN), identification of whether the award is R&D and indirect cost rate for the Federal award. According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause: There were no proper controls in place to ensure the subrecipient monitoring requirements of the grant were met. Effect: The City may not be in compliance with the subrecipient monitoring requirements of the grant. Questioned Costs: Unknown. Recommendation: We recommend the City establish and implement controls to maintain compliance with subrecipient monitoring requirements. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report. Auditor’s Conclusion: Finding remains as stated.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principes Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: COVID-19 – 84.425D - Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U - American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $72,595.67 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund programs revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were properly recorded. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $1,128,574.33 were expended and reported on the Seminole County School District’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District 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 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… (f) Not be included as a cost or used to meet the cost sharing or matching requirements of any other federally-financed program in either the current or a prior period, (g) Be adequately documented…” Condition: Auditors performed a review of expenditure activity associated with ESSER to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that expenditures for personnel services were overstated by $72,595.67 due to the duplication of salary and benefits expenditures in the general ledger. As a result, duplicate federal reimbursement funding was also requested and received for those unallowable expenditures. Questioned Costs: Known questioned costs of $72,595.67 were identified for unallowable expenditures that were reimbursed through ESSER programs. 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: In discussing this deficiency with management, they stated that the School District payroll accruals recorded in the general ledger were duplicated due to oversight causing salary and benefits expense charged to the ESSER program to be overstated. Effect: The School District is not in compliance with the Uniform Guidance and the U.S. Department of Education (ED) guidance related to the ESSER program. Failure to ensure that appropriate controls exist may expose the School District to unnecessary financial strains and shortages as the grantor and/or pass-through entity may require the School District to return funds associated with the unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that duplicate reimbursements are not sought from ESSER programs for the same expenditures. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principes Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: COVID-19 – 84.425D - Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U - American Rescue Plan Elementary and Secondary School Emergency Relief Fund Federal Award Number: S425D210012 (Year: 2021), S425U210012 (Year: 2021) Questioned Costs: $72,595.67 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund programs revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were properly recorded. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $1,128,574.33 were expended and reported on the Seminole County School District’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District 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 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… (f) Not be included as a cost or used to meet the cost sharing or matching requirements of any other federally-financed program in either the current or a prior period, (g) Be adequately documented…” Condition: Auditors performed a review of expenditure activity associated with ESSER to determine if appropriate internal controls were implemented and applicable compliance requirements were met. It was noted that expenditures for personnel services were overstated by $72,595.67 due to the duplication of salary and benefits expenditures in the general ledger. As a result, duplicate federal reimbursement funding was also requested and received for those unallowable expenditures. Questioned Costs: Known questioned costs of $72,595.67 were identified for unallowable expenditures that were reimbursed through ESSER programs. 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: In discussing this deficiency with management, they stated that the School District payroll accruals recorded in the general ledger were duplicated due to oversight causing salary and benefits expense charged to the ESSER program to be overstated. Effect: The School District is not in compliance with the Uniform Guidance and the U.S. Department of Education (ED) guidance related to the ESSER program. Failure to ensure that appropriate controls exist may expose the School District to unnecessary financial strains and shortages as the grantor and/or pass-through entity may require the School District to return funds associated with the unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that duplicate reimbursements are not sought from ESSER programs for the same expenditures. Furthermore, management should develop and implement a monitoring process to ensure that controls are operating appropriately. Views of Responsible Officials: We concur with this finding.
Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200 502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and information provided for audit purposes is complete and accurate. Condition Found: The Borough did not have adequate internal controls related to the reporting of expenditures on the SEFA for the Local Assistance and Tribal Consistency Fund. Specifically, the Borough’s did not have a control in place to review expenditures that were incurred, but not yet reported to the grantor, to ensure proper reporting on the SEFA. As a result, $4,187,325 of Local Assistance and Tribal Consistency Fund expenditures had been excluded from the SEFA for the year ended June 30, 2024. Cause: In discussing these conditions with the Borough, they stated that the Borough consistently followed a policy to report expenditures when expenditures are reported to the grantor. Management did not have a control in place to review the unreported expenditures for proper inclusion in the SEFA, if material. Possible Asserted Effect: Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA may result in inappropriate application of audit requirements. Repeat Finding: A similar finding was not reported in the prior year audit.Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the Borough establish internal controls to ensure expenditures are accurately reported on the SEFA and information provided for audit purposes is complete and accurate. Views of Responsible Officials: Management agrees with the finding. Management has implemented additional controls to ensure the completeness and accuracy of amounts reported in the schedule of federal awards.
2024-002: Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: California Department of Health Care Services Award ID and Period: 1B09SM090319, 6B09SM085337 and July 01, 2023, through June 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. The County should have internal controls designed to ensure that expenditures are recorded within the period of performance. Additionally, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award section 200.303 requires that entities establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing of Allowable Costs, we noted that the County incorrectly included payroll costs for the payroll period ended June 30, 2023, which were incurred before the period of performance. Questioned costs: $1,144 known questioned costs, plus $48,543 of likely questioned costs based on the likely assumption that all expenditures for the payroll period ended June 30, 2023, included on the general ledger of expenditures for the program, would all be found to have occurred prior to the period of performance if tested. Context: This condition was on 1 of 40 samples. Cause: The compilation of expenditures reported was based on the system date for when expenditures were recorded in the system instead of when the expenditures were incurred. Effect: Expenditures recorded to the grant may have been recorded outside of the grant’s period of performance. Repeat finding: Yes, the same issue was noted in the prior year under finding No. 2023-006. Recommendation: We recommend the County conduct training with its various departments to instruct them on how to compile expenditures based on the accrual basis of accounting (when the expenditures were incurred). Views of responsible officials: The County concurs with the finding.
2024-002: Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Pass-Through Agency: California Department of Health Care Services Award ID and Period: 1B09SM090319, 6B09SM085337 and July 01, 2023, through June 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. The County should have internal controls designed to ensure that expenditures are recorded within the period of performance. Additionally, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award section 200.303 requires that entities establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing of Allowable Costs, we noted that the County incorrectly included payroll costs for the payroll period ended June 30, 2023, which were incurred before the period of performance. Questioned costs: $1,144 known questioned costs, plus $48,543 of likely questioned costs based on the likely assumption that all expenditures for the payroll period ended June 30, 2023, included on the general ledger of expenditures for the program, would all be found to have occurred prior to the period of performance if tested. Context: This condition was on 1 of 40 samples. Cause: The compilation of expenditures reported was based on the system date for when expenditures were recorded in the system instead of when the expenditures were incurred. Effect: Expenditures recorded to the grant may have been recorded outside of the grant’s period of performance. Repeat finding: Yes, the same issue was noted in the prior year under finding No. 2023-006. Recommendation: We recommend the County conduct training with its various departments to instruct them on how to compile expenditures based on the accrual basis of accounting (when the expenditures were incurred). Views of responsible officials: The County concurs with the finding.
2024-003: Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Pass-Through Agency: California Department of Health Care Services Award ID and Period: 1B08TI087026-01,1B08TI083929-01 and July 01, 2023, through June 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. The County should have internal controls designed to ensure that expenditures are recorded within the period of performance. Additionally, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award section 200.303 requires that entities establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing of Allowable Costs, we noted that the County incorrectly included a portion of nonpayroll costs which were predominantly incurred before the period of performance. Questioned costs: $2,414 known questioned cost, plus $110,850 of likely questioned costs based on an extrapolation of the known error identified within the population tested. Context: This condition was identified on 5 of 10 samples testing during the first month of the period of performance. Cause: The compilation of expenditures reported was based on the system date for when expenditures were recorded in the system instead of when the expenditures were incurred. Effect: Expenditures recorded to the grant may have been recorded outside of the grant’s period of performance. Repeat finding: Yes, the same issue was noted in the prior year under finding No. 2023-007. Recommendation: We recommend the County conduct training with its various departments to instruct them on how to compile expenditures based on the accrual basis of accounting (when the expenditures were incurred). Views of responsible officials: The County concurs with the finding.
2024-003: Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Pass-Through Agency: California Department of Health Care Services Award ID and Period: 1B08TI087026-01,1B08TI083929-01 and July 01, 2023, through June 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of period of performance. The County should have internal controls designed to ensure that expenditures are recorded within the period of performance. Additionally, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award section 200.303 requires that entities establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing of Allowable Costs, we noted that the County incorrectly included a portion of nonpayroll costs which were predominantly incurred before the period of performance. Questioned costs: $2,414 known questioned cost, plus $110,850 of likely questioned costs based on an extrapolation of the known error identified within the population tested. Context: This condition was identified on 5 of 10 samples testing during the first month of the period of performance. Cause: The compilation of expenditures reported was based on the system date for when expenditures were recorded in the system instead of when the expenditures were incurred. Effect: Expenditures recorded to the grant may have been recorded outside of the grant’s period of performance. Repeat finding: Yes, the same issue was noted in the prior year under finding No. 2023-007. Recommendation: We recommend the County conduct training with its various departments to instruct them on how to compile expenditures based on the accrual basis of accounting (when the expenditures were incurred). Views of responsible officials: The County concurs with the finding.
2024-004: Allowable Costs – Indirect Costs Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Pass-Through Agency: California Department of Health Care Services Award ID and Period: 1B08TI087026-01,1B08TI083929-01 and July 01, 2023, through June 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of direct and indirect costs. The County should have internal controls designed to ensure administrative and other costs that cannot be identified specifically with a particular Federal award as a final cost objective are not recorded as direct costs to the program. Additionally, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award section 200.303 requires that entities establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing of Allowable Costs, we noted that the County recorded administrative and other indirect costs as direct costs to the Federal award. Questioned costs: None. Context: For a sample of 60 payroll and nonpayroll expenditures, 13 items tested were indirect costs in nature yet recorded as direct costs. Cause: The cost allocation program used by the Behavioral Health and Recovery Services (BHRS) department, to allocate costs to various Federal awards and other funding sources, included a blend of expenses that are both direct and indirect in nature as allocated direct costs. Effect: Reported program cost may not accurately reflect a correct allocation of indirect costs for the program. Repeat finding: Yes, the same issue was noted in the prior year under finding No. 2023-008. While the conditions causing expenses that are both direct and indirect in nature to be allocated as direct costs have not been corrected, segments of these costs included in the prior year’s reporting were sufficiently excluded from the current year’s reporting of program expenses that it was unlikely that indirect cost reported would exceed the program’s approved indirect cost rate. Recommendation: We recommend the County review the cost allocation process of the BHRS department to correctly classify costs between direct and indirect costs. Views of responsible officials: The County concurs with the finding.
2024-004: Allowable Costs – Indirect Costs Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Pass-Through Agency: California Department of Health Care Services Award ID and Period: 1B08TI087026-01,1B08TI083929-01 and July 01, 2023, through June 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance and Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of direct and indirect costs. The County should have internal controls designed to ensure administrative and other costs that cannot be identified specifically with a particular Federal award as a final cost objective are not recorded as direct costs to the program. Additionally, 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award section 200.303 requires that entities establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing of Allowable Costs, we noted that the County recorded administrative and other indirect costs as direct costs to the Federal award. Questioned costs: None. Context: For a sample of 60 payroll and nonpayroll expenditures, 13 items tested were indirect costs in nature yet recorded as direct costs. Cause: The cost allocation program used by the Behavioral Health and Recovery Services (BHRS) department, to allocate costs to various Federal awards and other funding sources, included a blend of expenses that are both direct and indirect in nature as allocated direct costs. Effect: Reported program cost may not accurately reflect a correct allocation of indirect costs for the program. Repeat finding: Yes, the same issue was noted in the prior year under finding No. 2023-008. While the conditions causing expenses that are both direct and indirect in nature to be allocated as direct costs have not been corrected, segments of these costs included in the prior year’s reporting were sufficiently excluded from the current year’s reporting of program expenses that it was unlikely that indirect cost reported would exceed the program’s approved indirect cost rate. Recommendation: We recommend the County review the cost allocation process of the BHRS department to correctly classify costs between direct and indirect costs. Views of responsible officials: The County concurs with the finding.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District 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…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District 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…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District 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…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
Assistance Listing Number, Federal Agency, and Program Name 21.027, U.S. Department of the Treasury, COVID 19 - Coronavirus State and Local Fiscal Recovery Funds, and 93.493, U.S. Department of Health and Human Services, Congressional Directives Federal Award Identification Number and Year 21.027 192908 and 93.493 6 CE2CS52794 01 07 Pass through Entity 21.027 Chicago Department of Public Health; 93.493 N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.319(a) All procurement transactions under the federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320(b) covering formal procurement methods. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold (SAT), including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Finally, per 2 CFR 180.300, nonfederal entities must verify that outside parties are not suspended or debarred from engaging in federal activity before entering into a covered transaction. Condition Controls were not sufficient to ensure procurement activities were performed in accordance with 2 CFR 200 and management’s internal policies and procedures related to procurement, suspension, and debarment. Questioned Costs $ 237,890 If Questioned Costs are not Determinable, Description of why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed Questioned costs represent expenditures under these contracts reported on the SEFA. Context For three contracts in excess of the Organization's formal procurement threshold ($50,000), management did not retain documentation of having obtained the required number of competitive bids or document rationale for sole procurement, did not document the history of procurement decisions, and was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Cause and Effect A lack of controls to ensure required procurement activities were performed could result in material noncompliance with federal procurement standards. Recommendation We recommend that management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Additionally, we recommend management review its internal procurement policy regularly to ensure compliance with federal procurement standards under 2 CFR 200.317 through 200.327. Views of Responsible Officials and Corrective Action Plan Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Careful consideration was done in selecting the vendors to look at obtaining the best cost for the value of the service as IWS was responsible for a portion of the expenses. Necessary revisions will be made to the existing procurement processes and controls in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.
Assistance Listing Number, Federal Agency, and Program Name 21.027, U.S. Department of the Treasury, COVID 19 - Coronavirus State and Local Fiscal Recovery Funds, and 93.493, U.S. Department of Health and Human Services, Congressional Directives Federal Award Identification Number and Year 21.027 192908 and 93.493 6 CE2CS52794 01 07 Pass through Entity 21.027 Chicago Department of Public Health; 93.493 N/A Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.318(i), the nonfederal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Per 2 CFR 200.319(a) All procurement transactions under the federal award must be conducted in a manner that provides full and open competition and is consistent with the standards of this section and § 200.320(b) covering formal procurement methods. Per 2 CFR 200.324(a), the nonfederal entity must perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold (SAT), including contract modifications. The method and degree of analysis is dependent upon the facts surrounding the particular procurement situation; but, as a starting point, the nonfederal entity must make independent estimates before receiving bids or proposals. Finally, per 2 CFR 180.300, nonfederal entities must verify that outside parties are not suspended or debarred from engaging in federal activity before entering into a covered transaction. Condition Controls were not sufficient to ensure procurement activities were performed in accordance with 2 CFR 200 and management’s internal policies and procedures related to procurement, suspension, and debarment. Questioned Costs $ 237,890 If Questioned Costs are not Determinable, Description of why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported N/A Identification of How Questioned Costs Were Computed Questioned costs represent expenditures under these contracts reported on the SEFA. Context For three contracts in excess of the Organization's formal procurement threshold ($50,000), management did not retain documentation of having obtained the required number of competitive bids or document rationale for sole procurement, did not document the history of procurement decisions, and was unable to provide evidence that contractors were checked for suspension and debarment in advance of entering into a covered transaction. Cause and Effect A lack of controls to ensure required procurement activities were performed could result in material noncompliance with federal procurement standards. Recommendation We recommend that management retain documented evidence that its policies and procedures were followed to ensure compliance with federal procurement standards. Additionally, we recommend management review its internal procurement policy regularly to ensure compliance with federal procurement standards under 2 CFR 200.317 through 200.327. Views of Responsible Officials and Corrective Action Plan Management agrees with the recommendation and will review the relevant guidance to ensure compliance. Careful consideration was done in selecting the vendors to look at obtaining the best cost for the value of the service as IWS was responsible for a portion of the expenses. Necessary revisions will be made to the existing procurement processes and controls in a timely manner to ensure that procurement decisions are documented, as required by 2 CFR Part 200.