Federal Agency: Federal Government Federal Program Name: Research & Development Assistance Listing Number: 10.205, 10.216, 12.630, 93.859 Federal Award Identification Number and Year: Multiple Award Period: 7/1/2023-6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 2 CFR 200.344(b), unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Condition: The University does not have adequate procedures in place to ensure federal awards are closed in a timely manner. Questioned costs: $125,035.65 Context: During our testing, we identified 10 transactions out of 60 that were incurred after the period of performance date. Additionally, during our testing, we identified 23 transactions out of 60, that was paid over 120 days after the period of performance had ended. Cause: The University does not have an effective control in place to ensure costs are properly incurred prior to the end of the federal awards period of performance. Effect: Failure to close federal awards and process necessary cost transfers in a timely manner may result in inaccurate periodic financial reports and unallowable costs. Repeat Finding: Yes, 2023-016. Recommendation: We recommend the University review its current close out procedures and implement additional procedures to monitor the timeliness of federal account close outs. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Federal Government Federal Program Name: Research & Development Assistance Listing Number: 10.205, 10.216, 12.630, 93.859 Federal Award Identification Number and Year: Multiple Award Period: 7/1/2023-6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 2 CFR 200.344(b), unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Condition: The University does not have adequate procedures in place to ensure federal awards are closed in a timely manner. Questioned costs: $125,035.65 Context: During our testing, we identified 10 transactions out of 60 that were incurred after the period of performance date. Additionally, during our testing, we identified 23 transactions out of 60, that was paid over 120 days after the period of performance had ended. Cause: The University does not have an effective control in place to ensure costs are properly incurred prior to the end of the federal awards period of performance. Effect: Failure to close federal awards and process necessary cost transfers in a timely manner may result in inaccurate periodic financial reports and unallowable costs. Repeat Finding: Yes, 2023-016. Recommendation: We recommend the University review its current close out procedures and implement additional procedures to monitor the timeliness of federal account close outs. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Federal Government Federal Program Name: Research & Development Assistance Listing Number: 10.205, 10.216, 12.630, 93.859 Federal Award Identification Number and Year: Multiple Award Period: 7/1/2023-6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 2 CFR 200.344(b), unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Condition: The University does not have adequate procedures in place to ensure federal awards are closed in a timely manner. Questioned costs: $125,035.65 Context: During our testing, we identified 10 transactions out of 60 that were incurred after the period of performance date. Additionally, during our testing, we identified 23 transactions out of 60, that was paid over 120 days after the period of performance had ended. Cause: The University does not have an effective control in place to ensure costs are properly incurred prior to the end of the federal awards period of performance. Effect: Failure to close federal awards and process necessary cost transfers in a timely manner may result in inaccurate periodic financial reports and unallowable costs. Repeat Finding: Yes, 2023-016. Recommendation: We recommend the University review its current close out procedures and implement additional procedures to monitor the timeliness of federal account close outs. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Federal Government Federal Program Name: Research & Development Assistance Listing Number: 10.205, 10.216, 12.630, 93.859 Federal Award Identification Number and Year: Multiple Award Period: 7/1/2023-6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 2 CFR 200.344(b), unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Condition: The University does not have adequate procedures in place to ensure federal awards are closed in a timely manner. Questioned costs: $125,035.65 Context: During our testing, we identified 10 transactions out of 60 that were incurred after the period of performance date. Additionally, during our testing, we identified 23 transactions out of 60, that was paid over 120 days after the period of performance had ended. Cause: The University does not have an effective control in place to ensure costs are properly incurred prior to the end of the federal awards period of performance. Effect: Failure to close federal awards and process necessary cost transfers in a timely manner may result in inaccurate periodic financial reports and unallowable costs. Repeat Finding: Yes, 2023-016. Recommendation: We recommend the University review its current close out procedures and implement additional procedures to monitor the timeliness of federal account close outs. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Federal Government Federal Program Name: Research & Development Assistance Listing Number: 10.205, 10.216, 12.630, 93.859 Federal Award Identification Number and Year: Multiple Award Period: 7/1/2023-6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 2 CFR 200.344(b), unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Condition: The University does not have adequate procedures in place to ensure federal awards are closed in a timely manner. Questioned costs: $125,035.65 Context: During our testing, we identified 10 transactions out of 60 that were incurred after the period of performance date. Additionally, during our testing, we identified 23 transactions out of 60, that was paid over 120 days after the period of performance had ended. Cause: The University does not have an effective control in place to ensure costs are properly incurred prior to the end of the federal awards period of performance. Effect: Failure to close federal awards and process necessary cost transfers in a timely manner may result in inaccurate periodic financial reports and unallowable costs. Repeat Finding: Yes, 2023-016. Recommendation: We recommend the University review its current close out procedures and implement additional procedures to monitor the timeliness of federal account close outs. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Federal Government Federal Program Name: Research & Development Assistance Listing Number: 10.205, 10.216, 12.630, 93.859 Federal Award Identification Number and Year: Multiple Award Period: 7/1/2023-6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 2 CFR 200.344(b), unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Condition: The University does not have adequate procedures in place to ensure federal awards are closed in a timely manner. Questioned costs: $125,035.65 Context: During our testing, we identified 10 transactions out of 60 that were incurred after the period of performance date. Additionally, during our testing, we identified 23 transactions out of 60, that was paid over 120 days after the period of performance had ended. Cause: The University does not have an effective control in place to ensure costs are properly incurred prior to the end of the federal awards period of performance. Effect: Failure to close federal awards and process necessary cost transfers in a timely manner may result in inaccurate periodic financial reports and unallowable costs. Repeat Finding: Yes, 2023-016. Recommendation: We recommend the University review its current close out procedures and implement additional procedures to monitor the timeliness of federal account close outs. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: Federal Government Federal Program Name: Research & Development Assistance Listing Number: 10.205, 10.216, 12.630, 93.859 Federal Award Identification Number and Year: Multiple Award Period: 7/1/2023-6/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Per 2 CFR 200.344(b), unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. Condition: The University does not have adequate procedures in place to ensure federal awards are closed in a timely manner. Questioned costs: $125,035.65 Context: During our testing, we identified 10 transactions out of 60 that were incurred after the period of performance date. Additionally, during our testing, we identified 23 transactions out of 60, that was paid over 120 days after the period of performance had ended. Cause: The University does not have an effective control in place to ensure costs are properly incurred prior to the end of the federal awards period of performance. Effect: Failure to close federal awards and process necessary cost transfers in a timely manner may result in inaccurate periodic financial reports and unallowable costs. Repeat Finding: Yes, 2023-016. Recommendation: We recommend the University review its current close out procedures and implement additional procedures to monitor the timeliness of federal account close outs. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Department of the Treasury FFAL #21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Applicable Federal Award Number and Year – SLFRP0336 for 2021 Reporting Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The County’s quarterly Project and Expenditure Report for the quarter ended September 2023 reported several items as current period obligations that were reported as current period obligations in the previous quarter. Cause: The County’s internal control process included a secondary review and approval of the Project and Expenditure Reports. However, the review did not identify the errors in the amounts reported as current period obligations in the September 2023 report. Effect: Inaccurate information was reported to the federal awarding agency. Questioned Costs: None reported. Context: A nonstatistical sample of two out of the four quarterly Project and Expenditure Reports were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the County implement a control process which includes a secondary review and approval of the amounts reported as current period obligations within the Project and Expenditure Reports. Views of Responsible Officials: The Finance Director currently reconciles cumulative expenditures to the reports prepared by the Senior Accountant before signing and dating the report, prior to submission by the Senior Accountant. There will be no additional current obligations in the future due to the December 31, 2024 deadline for obligations.
Federal Agency: Substance Abuse and Mental Health Services Administration Federal Program Name: National Text and Call Center Backups Assistance Listing Number: 93.243 Pass-Through Agency: The Mental Health Association of New York City, Inc. DBA Vibrant Emotional Health Award Period: April 1, 2023 – September 29, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR section 200.303(a) requires that non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization did not consistently review monthly billings. Questioned costs: None Context: We tested a sample of 5 reimbursement requests, noting there were no reviews taking place. Cause: Management indicated a review process is not in place. Effect: The effect of this condition increases the possibility that costs submitted for reimbursement may be inaccurate. Repeat Finding: No Recommendation: We recommend the Organization documents review of all billings. Views of Responsible Officials: There is no disagreement with the audit finding.
Criteria: 2 CFR 200.303 states a non-Federal entity must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our audit, auditors tested 25 employees for completion certificate of required training as a condition of the grants. Three of the required annual training were significantly non-compliant. • The Annual HIPPA Training 23 of the 25 (92%) of employees did not properly complete the training. • The Annual Security Awareness Training 4 of the 25 (16%) of employees did not properly complete the training. • The Annual Service Delivery for Deaf and Hard of Hearing Training 15 of the 25 (60%) of employees did not properly complete the training. Questioned Costs: No questioned costs were noted. Cause: The cause of this condition appears to be a lack of oversight in monitoring training completion records and insufficient internal controls over training compliance. Effect: Failure to properly complete required training increases the risk of noncompliance with federal program requirements, potentially leading to disallowed costs, penalties, or other adverse consequences.Recommendation: We recommend that management, enhance internal controls over training compliance by implementing more effective tracking and monitoring system and assign responsibility for ensuring timely completion of required training to a specific individual or department. Additionally, we recommend Hibiscus consider implementing a rolling-year training schedule rather than an annual hire-date renewal process. This approach can streamline tracking, reduce administrative burdens, and ensure consistent compliance by aligning training requirements with a standard cycle applicable to all employees.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-002 – Allowable Costs/Cost Principles Identification of the federal program: U.S. Department of Health and Human Services Medicaid Cluster Assistance Listing No. 93.778 Medical Assistance Program Passed through County of Los Angeles Department of Public Health Pass Through Number Pass Through Entity Grant Period PH-004983 County of Los Angeles 10/1/2022–06/30/2025 Dignity Community Care, DBA California Hospital Medical Center Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At California Hospital Medical Center, internal controls over the required allowability criteria with regard to payroll expense were not performed for 3 of 60 employees selected for testing. Cause: California Hospital Medical Center management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 60 payroll expenditures selected for testing, California Hospital Medical Center management did not properly approve the employee timecard for time charged to the grant in accordance with the practices of California Hospital Medical Center. Total payroll expenditures for California Hospital Medical Center were approximately $0.2 million and represent 7% of the total Medical Assistance Program expenditures of approximately $3.3 million. Identification of a repeat finding: This is not a repeat finding. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and implemented corrective action in July 2024, to require approval of timecards.
Finding 2024-003 – Special Tests and Provisions – Return of Title IV Funds Identification of the federal program: U.S. Department of Education Office of Federal Student Aid Student Financial Assistance Cluster Assistance Listing No. 84.268 Federal Direct Student Loans Good Samaritan College of Nursing & Health Science Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that a 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. These internal controls should be compliance with guidance in “Standards for Internal Control the Federal Government” issued by the Comptroller General the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 34 CFR section 668.173(b) requires timely return of title IV, HEA program funds. “In accordance with procedures established by the Secretary or FFEL Program lender, an institution returns unearned title IV, HEA program funds timely if – (1) The institution deposits or transfers the funds into the bank account it maintains under § 668.163 no later than 45 days after the date it determines that the student withdrew; (2) The institution initiates an electronic funds transfer (EFT) no later than 45 days after the date it determines that the student withdrew; (3) The institution initiates an electronic transaction, no later than 45 days after the date it determines that the student withdrew, that informs a FFEL lender to adjust the borrower’s loan account for the amount returned; or (4) The institution issues a check no later than 45 days after the date it determines that the student withdrew. An institution does not satisfy this requirement if – (i) The institution’s records show that the check was issued more than 45 days after the date the institution determined that the student withdrew or (ii) The date on the cancelled check shows that the bank used by the Secretary or FFEL Program lender endorsed that check more than 60 days after the date the institution determined that the student withdrew.” Condition: Good Samaritan College of Nursing & Health Science did not provide evidence of an effective review process to ensure the timely calculation and return of Title IV funds to the U.S. Department of Education. Good Samaritan College of Nursing & Health Science did not calculate and return Title IV funds in a timely manner to the U.S. Department of Education for 1 of 5 students within 45 days after the date the institution determined that the student withdrew. Cause: Good Samaritan College of Nursing & Health Science has been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. Effect or potential effect: Good Samaritan College of Nursing & Health Science is not returning Title IV funds within the required time frame to the U.S. Department of Education, resulting in noncompliance. Questioned costs: None. Context: After obtaining an understanding of the internal controls over return of Title IV funds, we determined internal controls were not designed sufficiently to ensure compliance with timely calculation and returns of Title IV funds. EY selected and tested 5 students from the population of 18 students who withdrew during the year ended June 30, 2024. Of the 5 students selected, returns of Title IV funds were required for all 5 of the students. For 1 of the 5 students who required a return, Good Samaritan College of Nursing & Health Science calculated and returned the funds after 45 days from the date Good Samaritan College of Nursing & Health Science determined the student withdrew. The return of Title IV funds for that student was made in 58 days and totaled $3,761 and consisted of Direct Loans. Total direct loans for Good Samaritan College of Nursing & Health Science are approximately $4.0 million, representing 70% of Good Samaritan College of Nursing & Health Science’s SFA Cluster expenditures of approximately $5.7 million, and 95% of total SFA Cluster expenditures of approximately $6.0 million. Identification as a repeat finding, if applicable: This is a repeat finding for Good Samaritan College of Nursing & Health Science – Finding 2023-012. Recommendation: Management should review and revise its internal controls and procedures in place over the return of Title IV funds to ensure that the returns of Title IV funds are made within the required time frame. Views of responsible officials: Management agrees with the finding and implemented corrective action in April 2024.
Finding 2024-004 – Eligibility Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Number Pass Through Entity Grant Period 10126 PREV King County Public Health 3/1/2023–2/29/2024 11987 PREV King County Public Health 3/1/2024–2/28/2025 Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: Bailey-Boushay House has processes in place to verify whether participants are eligible; however, documentation to evidence the execution of the controls was not retained. Cause: Bailey-Boushay House management did not retain evidence of the execution of controls due to lack of understanding of the need to retain the documentation. Effect or potential effect: Ineligible individuals may be provided services. Questioned costs: None. Context: Total expenditures for Bailey-Boushay House were approximately $1.4 million and represent 29.8% of the total HIV program expenditures of approximately $4.6 million. However, expenditures are not based upon serving eligible patients. Due to the lack of retaining evidence to document controls, EY did not select controls to test. Identification of a repeat finding: This is not a repeat finding. Recommendation: We recommend management maintain evidence of the execution of internal controls related to documentation that individuals served are eligible to participate in the program. Views of responsible officials: Management agrees with the finding and has developed a corrective action plan to include retaining evidence to support the execution of controls over eligibility determinations. The corrective action will be implemented in February 2025.
Finding 2024-005 - Special Tests and Provisions - Enrollment Reporting Identification of the federal program: U.S. Department of Education Office of Federal Student Aid Student Financial Assistance Cluster Assistance Listing No. 84.063 Federal Pell Grant Program Assistance Listing No. 84.268 Federal Direct Student Loans Good Samaritan College of Nursing & Health Science Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that a 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. These internal controls should be compliance with guidance in “Standards for Internal Control the Federal Government” issued by the Comptroller General the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Institutions are responsible for accurately reporting to the National Student Loan Data System (NSLDS) the following significant data elements under the Campus-Level Record and Program-Level Record that Department of Education (ED) considers high risk. ED considers the following Campus-Level data elements to be high risk: 1. Office of Postsecondary Education Identification (OPEID) Number 2. Enrollment Effective Date 3. Enrollment Status 4. Certification Date ED considers the following Program-Level Record data elements to be high risk: 1. OPEID Number 2. CIP Code 3. CIP Year 4. Credential Level 5. Published Program Length Measurement 6. Published Program Length 7. Program Begin Date 8. Program Enrollment Status 9. Program Enrollment Effective Date When a Direct Loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address, the institution must report the change in its next updated Enrollment Reporting Roster file (due within 60 days of the change). NSLDS Enrollment Reporting Guide Chapter 1.4: At a minimum, schools are required to certify enrollment every 60 days, and respond within 15 days of the date that the NSLDS sends a roster file to the school or its third-party servicer. This requirement also applies to schools that report exclusively online. Condition: Good Samaritan College of Nursing & Health Science did not have effective internal controls over enrollment reporting. Student enrollment information, including enrollment status changes and campus level and program level information, was not reported accurately and/or timely to the NSLDS for certain students. Cause: Good Samaritan College of Nursing & Health Science has been developing and implementing internal controls in response to the prior year finding over enrollment reporting; however, ineffective internal control led to untimely reporting and inaccurate data reported for certain students. Additionally, in the current year, a different matter was noted in that the third-party system that is used to generate reports to validate status changes was not accurate, resulting in certain enrollment status changes not being submitted to NSLDS timely. Effect or potential effect: Lack of internal controls over timely and accurate enrollment reporting resulted in inaccurate enrollment status. A student’s enrollment status determines eligibility for in-school status, deferment, and grace periods. Enrollment reporting in a timely and accurate manner is important for effective management of the programs. Questioned costs: None. Context: EY selected 61 students from a population of 121 students receiving Pell and Direct Student Loans to test whether the required student enrollment information was accurately and timely reported to NSLDS. For the 61 students selected for testing, we tested 16 attributes for each student, for a total of 976 attributes. Of the 61 students selected, enrollment status was not reported timely, within 60 days, for 4 students receiving direct loans, with reporting to NSLDS ranging from 73 to 187 days. Additionally, of the 61 students selected, for 2 students receiving a direct loan, the correct enrollment status of withdrawn was never reported to NSLDS. As a result of the enrollment status for 6 students being reported late or inaccurately, we noted Campus-Level information was inaccurate in 10 instances for 3 data elements and Program-Level information was inaccurate in 4 instances for 2 data elements. In addition, of the 61 students selected, the program begin date was inaccurately reported for 2 students. Good Samaritan College of Nursing & Health Science has SFA Cluster expenditures of approximately $5.7 million, which makes up 95% of total SFA Cluster expenditures of approximately $6.0 million. Identification as a repeat finding, if applicable: This is a repeat finding for Good Samaritan College of Nursing & Health Science – Findings 2023-010, 2022-005, and 2021-006. An additional internal control matter related to enrollment status is reported in the current year and is a different matter from that reported in the prior years. Recommendation: Good Samaritan College of Nursing & Health Science should refine processes and develop internal controls over enrollment reporting requirements to ensure information used to determine status changes is complete and accurate and that changes in enrollment status are reported timely. Views of responsible officials: Management at Good Samaritan College of Nursing & Health Science agrees with the finding and will work with the student financial aid vendor to ensure all status changes are appropriately captured.
Finding 2024-005 - Special Tests and Provisions - Enrollment Reporting Identification of the federal program: U.S. Department of Education Office of Federal Student Aid Student Financial Assistance Cluster Assistance Listing No. 84.063 Federal Pell Grant Program Assistance Listing No. 84.268 Federal Direct Student Loans Good Samaritan College of Nursing & Health Science Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303 requires that a 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. These internal controls should be compliance with guidance in “Standards for Internal Control the Federal Government” issued by the Comptroller General the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Institutions are responsible for accurately reporting to the National Student Loan Data System (NSLDS) the following significant data elements under the Campus-Level Record and Program-Level Record that Department of Education (ED) considers high risk. ED considers the following Campus-Level data elements to be high risk: 1. Office of Postsecondary Education Identification (OPEID) Number 2. Enrollment Effective Date 3. Enrollment Status 4. Certification Date ED considers the following Program-Level Record data elements to be high risk: 1. OPEID Number 2. CIP Code 3. CIP Year 4. Credential Level 5. Published Program Length Measurement 6. Published Program Length 7. Program Begin Date 8. Program Enrollment Status 9. Program Enrollment Effective Date When a Direct Loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address, the institution must report the change in its next updated Enrollment Reporting Roster file (due within 60 days of the change). NSLDS Enrollment Reporting Guide Chapter 1.4: At a minimum, schools are required to certify enrollment every 60 days, and respond within 15 days of the date that the NSLDS sends a roster file to the school or its third-party servicer. This requirement also applies to schools that report exclusively online. Condition: Good Samaritan College of Nursing & Health Science did not have effective internal controls over enrollment reporting. Student enrollment information, including enrollment status changes and campus level and program level information, was not reported accurately and/or timely to the NSLDS for certain students. Cause: Good Samaritan College of Nursing & Health Science has been developing and implementing internal controls in response to the prior year finding over enrollment reporting; however, ineffective internal control led to untimely reporting and inaccurate data reported for certain students. Additionally, in the current year, a different matter was noted in that the third-party system that is used to generate reports to validate status changes was not accurate, resulting in certain enrollment status changes not being submitted to NSLDS timely. Effect or potential effect: Lack of internal controls over timely and accurate enrollment reporting resulted in inaccurate enrollment status. A student’s enrollment status determines eligibility for in-school status, deferment, and grace periods. Enrollment reporting in a timely and accurate manner is important for effective management of the programs. Questioned costs: None. Context: EY selected 61 students from a population of 121 students receiving Pell and Direct Student Loans to test whether the required student enrollment information was accurately and timely reported to NSLDS. For the 61 students selected for testing, we tested 16 attributes for each student, for a total of 976 attributes. Of the 61 students selected, enrollment status was not reported timely, within 60 days, for 4 students receiving direct loans, with reporting to NSLDS ranging from 73 to 187 days. Additionally, of the 61 students selected, for 2 students receiving a direct loan, the correct enrollment status of withdrawn was never reported to NSLDS. As a result of the enrollment status for 6 students being reported late or inaccurately, we noted Campus-Level information was inaccurate in 10 instances for 3 data elements and Program-Level information was inaccurate in 4 instances for 2 data elements. In addition, of the 61 students selected, the program begin date was inaccurately reported for 2 students. Good Samaritan College of Nursing & Health Science has SFA Cluster expenditures of approximately $5.7 million, which makes up 95% of total SFA Cluster expenditures of approximately $6.0 million. Identification as a repeat finding, if applicable: This is a repeat finding for Good Samaritan College of Nursing & Health Science – Findings 2023-010, 2022-005, and 2021-006. An additional internal control matter related to enrollment status is reported in the current year and is a different matter from that reported in the prior years. Recommendation: Good Samaritan College of Nursing & Health Science should refine processes and develop internal controls over enrollment reporting requirements to ensure information used to determine status changes is complete and accurate and that changes in enrollment status are reported timely. Views of responsible officials: Management at Good Samaritan College of Nursing & Health Science agrees with the finding and will work with the student financial aid vendor to ensure all status changes are appropriately captured.
Finding 2024-006 – Allowable Costs/Cost Principles Identification of the federal program: U.S. Department of Treasury Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass-through entity: County of Los Angeles Pass-through number: PH-005009 St. Mary Medical Center – Long Beach Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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. 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: St. Mary Medical Center – Long Beach did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. Cause: St. Mary Medical Center – Long Beach did not have controls in place to ensure that all timecards were approved. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: No questioned costs. Context: We selected 25 payroll transactions totaling $8,621. Of the 25 transactions selected for testing, 2 timecards with supporting payroll expenditures of $246 were not appropriately approved. We did not note any noncompliance with 2 CFR 200.430. Total payroll expenditures for St. Mary Medical Center – Long Beach were $80,190 and represent approximately 6% of the total program expenditures of approximately $1.4 million. Identification of a repeat finding: This is a not a repeat finding as this program was not previously subject to audit. Recommendation: We recommend management at St. Mary Medical Center – Long Beach execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.010 A, Department of Education, Title I A, Improving Basic Programs Federal Award Identification Number and Year: 241530 Pass-through Entity: Michigan Department of Education Finding Type: Significant deficiency in internal control over compliance and noncompliance with parental involvement spending requirement. Repeat Finding: No Criteria: Per 2 CFR § 200.303, The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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). Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 84.010 A, Department of Education, Title I A, Improving Basic Programs Federal Award Identification Number and Year: 241530 Pass-through Entity: Michigan Department of Education Finding Type: Significant deficiency in internal control over compliance and noncompliance with parental involvement spending requirement. Repeat Finding: No Criteria: Per 2 CFR § 200.303, The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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: The School District is required to spend the 1% allocation of Parental Involvement for the Title I grant award. The allocation was properly recorded in the budget, but the School District did not spend the entire budgeted allocation required on Parental involvement during the fiscal year ended. Identification of How Questioned Costs Were Computed: N/A Questioned Costs: None Cause: Management did not properly monitor the parental involvement spending. The funds spent for parental involvement did not match the 1% allocation from the budget for the Federal award. The School Districts internal control policies and procedures did not ensure the proper amount of funds were spent on parental involvement. Condition: The School District is required to spend the 1% allocation of Parental Involvement for the Title I grant award. The allocation was properly recorded in the budget, but the School District did not spend the entire budgeted allocation required on Parental involvement during the fiscal year ended. Identification of How Questioned Costs Were Computed: N/A Questioned Costs: None Cause: Management did not properly monitor the parental involvement spending. The funds spent for parental involvement did not match the 1% allocation from the budget for the Federal award. The School Districts internal control policies and procedures did not ensure the proper amount of funds were spent on parental involvement. Effect: The entire parental involvement allocation was not spent during the fiscal year ended. Recommendation: We recommend that management review its procedures and controls in place to ensure that parental Involvement spend matches the allocated amount per the budget reports and the supporting documentation are retained and have proper evidence of review. View of Responsible Officials and Corrective Action Plan: Management agrees with the finding. See corrective action plan.
Finding 2024-003 SIGNIFICANT DEFICENCY Internal Controls and Compliance Criteria: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: There were no expenditures coded towards the federal funds for all of the fiscal year 2024. Cause: The internal control related to allowable costs and allowable activities are non-existent. Effect: The expenditures in the financial records did not match any expenditure amounts reported to the State to receive federal funds. Recommendations: The Director and the accounting department need to create procedures to ensure that both parties are reporting the same expenditures. Within the procedures created, there needs to be checks and balances to ensure that the recording is occurring before reporting figures to the State. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.
Finding 2024-003 SIGNIFICANT DEFICENCY Internal Controls and Compliance Criteria: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: There were no expenditures coded towards the federal funds for all of the fiscal year 2024. Cause: The internal control related to allowable costs and allowable activities are non-existent. Effect: The expenditures in the financial records did not match any expenditure amounts reported to the State to receive federal funds. Recommendations: The Director and the accounting department need to create procedures to ensure that both parties are reporting the same expenditures. Within the procedures created, there needs to be checks and balances to ensure that the recording is occurring before reporting figures to the State. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.
Federal agency: Department of Education Federal program title: Student Financial Assistance Cluster Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K243215 - 2023 Award Period: July 1, 2023, to June 30, 2024 Type of Finding: Compliance, Other Matter Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 34 CFR 668.21(a) states that the institution must return all title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for the payment period. The institution must return those funds no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: Oklahoma State University Oklahoma City (OSU OKC) incorrectly calculated Return to Title IV (R2T4) calculations. Context: During our testing of 5 students at OSU OKC, we identified 2 students had incorrect number of break days used in R2T4 calculation. Questioned costs: $65 Cause: OSU OKC was incorrectly calculating the appropriate number of scheduled break days in Fall Semester. Effect: The University could return incorrect amounts based off of their calculations and incorrect calculations could affect student repayment amounts based off of amount earned. Repeat finding: No Recommendation: We recommend OSU-OKC review its current process for determination of break days and ensure that their calculations are following compliance requirements. Views of responsible official: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: US Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.063, 84.268, Federal Award Identification Number and Year: P268K242046 - 2024, P063P232046 - 2024, P268K246759 - 2024 Award Period: July 1, 2023, to June 30, 2024 Type of Finding: Compliance, Other Matter Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Additionally, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless of if they receive aid from the institution or not. Changes to said status are required to be reported within 30 days of becoming aware of the status change, or with the next scheduled transmission of statuses if the scheduled transmission is within 60 days. Condition: The Oklahoma State University Center for Health Sciences (OSU CHS) did not properly report student enrollment changes for students who received federal student aid to the National Student Loan Data System (NSLDS). Context: During our testing of 2 students at OSU CHS, we identified 1 student that had incorrect program enrollment effective date. Questioned costs: None Cause: OSU CHS did not have proper procedures in place to verify students' status in NSLDS matched the institutions records in a timely manner. Effect: The University was not in compliance with the requirements to properly report student enrollment data correctly. Repeat finding: No Recommendation: We recommend OSU CHS review current processes for reporting to NSLDS and implement procedures to ensure program enrollment submissions are reported accurately. View of responsible official: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: US Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.063, 84.268, Federal Award Identification Number and Year: P268K242046 - 2024, P063P232046 - 2024, P268K246759 - 2024 Award Period: July 1, 2023, to June 30, 2024 Type of Finding: Compliance, Other Matter Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Additionally, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless of if they receive aid from the institution or not. Changes to said status are required to be reported within 30 days of becoming aware of the status change, or with the next scheduled transmission of statuses if the scheduled transmission is within 60 days. Condition: The Oklahoma State University Center for Health Sciences (OSU CHS) did not properly report student enrollment changes for students who received federal student aid to the National Student Loan Data System (NSLDS). Context: During our testing of 2 students at OSU CHS, we identified 1 student that had incorrect program enrollment effective date. Questioned costs: None Cause: OSU CHS did not have proper procedures in place to verify students' status in NSLDS matched the institutions records in a timely manner. Effect: The University was not in compliance with the requirements to properly report student enrollment data correctly. Repeat finding: No Recommendation: We recommend OSU CHS review current processes for reporting to NSLDS and implement procedures to ensure program enrollment submissions are reported accurately. View of responsible official: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: US Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Number: 84.063, 84.268, Federal Award Identification Number and Year: P268K242046 - 2024, P063P232046 - 2024, P268K246759 - 2024 Award Period: July 1, 2023, to June 30, 2024 Type of Finding: Compliance, Other Matter Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Additionally, 34 CFR 682.610, states that institutions must report accurately the enrollment status of all students regardless of if they receive aid from the institution or not. Changes to said status are required to be reported within 30 days of becoming aware of the status change, or with the next scheduled transmission of statuses if the scheduled transmission is within 60 days. Condition: The Oklahoma State University Center for Health Sciences (OSU CHS) did not properly report student enrollment changes for students who received federal student aid to the National Student Loan Data System (NSLDS). Context: During our testing of 2 students at OSU CHS, we identified 1 student that had incorrect program enrollment effective date. Questioned costs: None Cause: OSU CHS did not have proper procedures in place to verify students' status in NSLDS matched the institutions records in a timely manner. Effect: The University was not in compliance with the requirements to properly report student enrollment data correctly. Repeat finding: No Recommendation: We recommend OSU CHS review current processes for reporting to NSLDS and implement procedures to ensure program enrollment submissions are reported accurately. View of responsible official: Management agrees with the finding and has developed a plan to correct the finding.
FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001 Subject: Child Nutrition Cluster - Eligibility Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY22-23, FY23-24 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Eligibility Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the compliance requirements for Eligibility related to income guidelines and direct certifications. The Food Service Director entered the income guidelines into the Harmony software at the beginning of each school year. Free and reduced applications are processed through the Harmony software, which makes the determination for each student based on the income guidelines entered by the Food Service Director. There were no internal controls in place to ensure the Food Service Director entered the income guidelines into the Harmony software correctly. There was no internal control in place to ensure that direct certification reports were processed at the start of the school year and monthly thereafter, or that the student statuses were updated accordingly. Additionally, there was no review to verify that the year-to-date direct certification reports were processed to identify any students that were missed in a prior month when the report was not processed. Of the 25 students tested, 1 had the wrong status in the Harmony software from August 9, 2022 to January 30, 2023. The student was listed as paying the reduced rate for meals but should have been classified as eligible for free meals. The direct certification reports for the audit period were not retained; therefore, we could not verify that the students who were enrolled during the fiscal years 2022-2023 or 2023-2024 qualified for free or reduced meals under the direct certification method. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 16 NORTH CENTRAL PARKE COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 245.3(c) states in part: "Each School Food Authority shall serve free and reduced price meals or free milk in the respective programs to children eligible under its eligibility criteria. . . ." 7 CFR 245.6(b)1(iii) states: "Beginning in School Year 2012-2013, direct certification shall be conducted using a data matching technique only and letters to household for direct certification may be used only as an additional means to notify households of children's eligibility based on receipt of SNAP benefits. The last period that letters to households may be used as the primary method for direct certification is School Year 2011-12." Cause The School Corporation was unaware that they needed to verify the income guidelines in the software system and to maintain the year-to-date direct certification reports as stated above. Effect Without an effectively designed system of internal controls, the School Corporation did not verify children who were on the direct certification listing monthly as required. This allowed a student to be incorrectly classified in the software system and prevented the student from receiving the appropriate assistance. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management strengthen its system of internal controls to ensure that they review income guidelines in the Harmony software, process the direct certification reports monthly, and update the student statuses accordingly. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
NON-COMPLIANCE AND DEFICIENCY IN INTERNAL CONTROLS OVER COMPLIANCE WITH SUSPENSION AND DEBARMENT REQUIREMENTS Federal Agency: U.S. Department of Treasury Federal Program Title: COVID 19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Pass-Through Entities: Cook County Department of Public Health and Illinois Department of Human Services Criteria – In accordance with 2 CFR part 180 non-federal entities are prohibited from contracting with, or making subawards to parties that are suspended or debarred, or otherwise excluded. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. The requirement is for non-federal entities to check for suspended or debarred persons or entities before entering into covered transactions with them. In addition, 2 CFR 200.303 requires that “The non-Federal entity must: (a) Establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award”. Condition – The Organization has a federal suspension and debarment policy however, the Organization did not perform the proper suspension and debarment check on SAM.gov for the tested vendors in our sample, prior to engaging them to provide goods or services to the Organization. We tested a sample of three vendors in a total population of fifteen subject to this compliance requirement for the major program. Questioned Costs – None, as management subsequently demonstrated that none of the tested vendors contracted in covered transactions had been suspended or debarred. Effect – The Organization did not perform proper suspension and debarment procedures regarding certain vendors of covered transaction prior to obtaining their services. This could have resulted in disallowed costs by the federal grantor. Cause – The Organization did not follow the written policies, procedures and controls in place to ensure compliance with the federal suspension and debarment. Recommendation – We recommend that the Organization strengthen procedures and internal controls to ensure that the Uniform Guidance suspension and debarment requirements are complied with, and that support for the dates and the results of suspension and debarment checks on SAM.gov are retained. Views of Responsible Officials – We agree with the auditors’ finding.
NON-COMPLIANCE AND DEFICIENCY IN INTERNAL CONTROLS OVER COMPLIANCE WITH SUSPENSION AND DEBARMENT REQUIREMENTS Federal Agency: U.S. Department of Treasury Federal Program Title: COVID 19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listing: 21.027 Pass-Through Entities: Cook County Department of Public Health and Illinois Department of Human Services Criteria – In accordance with 2 CFR part 180 non-federal entities are prohibited from contracting with, or making subawards to parties that are suspended or debarred, or otherwise excluded. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. The requirement is for non-federal entities to check for suspended or debarred persons or entities before entering into covered transactions with them. In addition, 2 CFR 200.303 requires that “The non-Federal entity must: (a) Establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award”. Condition – The Organization has a federal suspension and debarment policy however, the Organization did not perform the proper suspension and debarment check on SAM.gov for the tested vendors in our sample, prior to engaging them to provide goods or services to the Organization. We tested a sample of three vendors in a total population of fifteen subject to this compliance requirement for the major program. Questioned Costs – None, as management subsequently demonstrated that none of the tested vendors contracted in covered transactions had been suspended or debarred. Effect – The Organization did not perform proper suspension and debarment procedures regarding certain vendors of covered transaction prior to obtaining their services. This could have resulted in disallowed costs by the federal grantor. Cause – The Organization did not follow the written policies, procedures and controls in place to ensure compliance with the federal suspension and debarment. Recommendation – We recommend that the Organization strengthen procedures and internal controls to ensure that the Uniform Guidance suspension and debarment requirements are complied with, and that support for the dates and the results of suspension and debarment checks on SAM.gov are retained. Views of Responsible Officials – We agree with the auditors’ finding.
Allowable Costs/Activities Allowed – Approval of Invoices Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 and Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Social Services Block Grant Assistance Listing Number: 93.667 Type of Finding: Significant Deficiency over Internal Control over Compliance. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statutes, regulations and conditions of the federal awards. Condition: During our testing, we noted invoices that lacked proper review documentation. Context: Of the 50 selections we tested across both major federal programs, we noted 23 did not have evidence of review and approval. Effect: Costs could be charged to federal programs which are unallowed due to lack of review by appropriate personnel. The Organization also had turnover in the accounting department. Cause: The Organization did not follow its fiscal policies and procedures on obtaining invoice approval. Recommendation: Management should ensure it is following its fiscal policies and procedures on invoice approval. Grantee Comment: Refer to Corrective Action Plan
Allowable Costs/Activities Allowed – Approval of Invoices Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 and Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Social Services Block Grant Assistance Listing Number: 93.667 Type of Finding: Significant Deficiency over Internal Control over Compliance. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statutes, regulations and conditions of the federal awards. Condition: During our testing, we noted invoices that lacked proper review documentation. Context: Of the 50 selections we tested across both major federal programs, we noted 23 did not have evidence of review and approval. Effect: Costs could be charged to federal programs which are unallowed due to lack of review by appropriate personnel. The Organization also had turnover in the accounting department. Cause: The Organization did not follow its fiscal policies and procedures on obtaining invoice approval. Recommendation: Management should ensure it is following its fiscal policies and procedures on invoice approval. Grantee Comment: Refer to Corrective Action Plan
Allowable Costs/Activities Allowed – Approval of Invoices Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 and Funding Agency: U.S. Department of Health and Human Services Pass-through from Georgia Department of Behavioral Health and Developmental Disabilities Grant: Social Services Block Grant Assistance Listing Number: 93.667 Type of Finding: Significant Deficiency over Internal Control over Compliance. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statutes, regulations and conditions of the federal awards. Condition: During our testing, we noted invoices that lacked proper review documentation. Context: Of the 50 selections we tested across both major federal programs, we noted 23 did not have evidence of review and approval. Effect: Costs could be charged to federal programs which are unallowed due to lack of review by appropriate personnel. The Organization also had turnover in the accounting department. Cause: The Organization did not follow its fiscal policies and procedures on obtaining invoice approval. Recommendation: Management should ensure it is following its fiscal policies and procedures on invoice approval. Grantee Comment: Refer to Corrective Action Plan
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "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. 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). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "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. 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). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "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. 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). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Grants to States Assistance Listing Number: 84.027, 84.027X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-090-PN01, 23611-090-PN01, 22611-090-ARP, 24611-090-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Finding: Material Weakness Criteria: 2 CFR 200.303 states in part: "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. 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). . . ." 2 CFR 200.318(a) states: "The non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards identified in this part." 2 CFR 200.320 states in part: "The non-Federal Entity must use one of the following methods of procurement. . . . (b) Procurement by small purchase procedures. Small purchase procedures are those relatively simple and informal procurement methods for securing services, supplies, or other property that do not cost more than the Simplified Acquisition Threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources. . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the Special Education Cluster and Procurement compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls that would have ensured compliance with the Procurement and Suspension and Debarment compliance requirement. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For the three small purchase method procurements sampled for testing, we noted that the School Corporation, did not obtain quotes from an adequate number of qualified sources. The total amount disbursed for the sample items was $127,299 in FY23 and $25,354 in FY24 for contracted rehabilitation therapy and speech pathology services. Additionally, the School Corporation did not perform suspension and debarment checks on the sample vendors. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding numbers were 2022-005 and 2022-006. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to ensure that the School Corporation’s procurement policy is adhered to and quotes are obtained from an adequate number of qualified sources as required for small purchase method procurements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal 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). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II amount reported on the Year 3 report ($572,289) did not agree to the underlying expenditure records ($558,956) for the period of July 1, 2021 through June 30, 2022. Additionally, we noted that the ESSER I, ESSER II, and ESSER III amounts reported on the Year 4 report ($105,506, $510,158, and $1,156,254, respectively) did not agree to the underlying expenditure records ($138,662, $316,236, and $1,158,054, respectively) for the period of July 1, 2022 through June 30, 2023. We also noted there was no documented, secondary review of the information in the annual data reports by someone other than the preparer. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-008. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Finding: Material Weakness Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal 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). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 Financial reporting . . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation was required to submit two Annual Data Reports to the Indiana Department of Education (IDOE) during the audit period to meet federal reporting requirements for ESSER grant awards. We noted that the ESSER II amount reported on the Year 3 report ($572,289) did not agree to the underlying expenditure records ($558,956) for the period of July 1, 2021 through June 30, 2022. Additionally, we noted that the ESSER I, ESSER II, and ESSER III amounts reported on the Year 4 report ($105,506, $510,158, and $1,156,254, respectively) did not agree to the underlying expenditure records ($138,662, $316,236, and $1,158,054, respectively) for the period of July 1, 2022 through June 30, 2023. We also noted there was no documented, secondary review of the information in the annual data reports by someone other than the preparer. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-008. Recommendation: We recommend someone other than the preparer of the report perform a documented review prior to submission to validate the accuracy and completeness of the data submitted. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Education Stabilization Fund – Special Tests and Provisions - Wage Rate Requirements Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Material Weakness, Material Noncompliance, Qualified Opinion Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal 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) 29 CFR 5.5 states in part: (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable. . . . (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: For the one project sampled for Davis-Bacon requirements, the School Corporation did not obtain the weekly payroll reports certifications from the company that performed renovations on the School Corporation. Therefore, no review was performed to ensure that pay rates complied with the federal wage rate requirements. Additionally, the School Corporation did not have a contract with the company that included the clause for the federal wage rate requirements. The amount disbursed and reported on the SEFA during the audit period is $1,114,159. Identification as a repeat finding: No. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2024-002 Approval Of Expense Transactions - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles U.S. Department of Treasury - Pass through from NV State Public Charter School Authority: ALNs 21.027 - COVID-19: Coronavirus State and Local Fiscal Recovery Funds Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that payroll transactions are approved by the respective principal prior to their submission for payment Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing the principal’s approval of the federal grant expense was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before payroll transactions were submitted for payment. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by the principal for accuracy and completeness. Questioned Costs: Not applicable. Context: These audit findings represent a systemic issue. Identification As A Repeat Finding: Yes Recommendation: The School should maintain proper documentation for all payroll transactions. View Of Responsible Officials: A process was put in place in January 2024 to ensure that all principal approvals are documented in writing or electronic approval in the system which can be date stamped by the system. Payroll will not be run, nor grants submitted, until proper approval is received.
2024-002 Approval Of Expense Transactions - Significant Deficiency - Activities Allowed Or Unallowed And Allowable Costs/Cost Principles U.S. Department of Treasury - Pass through from NV State Public Charter School Authority: ALNs 21.027 - COVID-19: Coronavirus State and Local Fiscal Recovery Funds Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The School has an internal control in place that payroll transactions are approved by the respective principal prior to their submission for payment Condition: During the course of the audit, the engagement team identified multiple expenditures where the support showing the principal’s approval of the federal grant expense was unable to be provided. Cause: The entity did not maintain sufficient support documentation to prove that expenditures were reviewed before payroll transactions were submitted for payment. Effect: Potential noncompliance could occur if expenditure amounts are not reviewed by the principal for accuracy and completeness. Questioned Costs: Not applicable. Context: These audit findings represent a systemic issue. Identification As A Repeat Finding: Yes Recommendation: The School should maintain proper documentation for all payroll transactions. View Of Responsible Officials: A process was put in place in January 2024 to ensure that all principal approvals are documented in writing or electronic approval in the system which can be date stamped by the system. Payroll will not be run, nor grants submitted, until proper approval is received.
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over 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 of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 004: Reporting Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or specific requirement: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds, including for mandatory reservations. Amounts reports must be supported by the unit's records. Per 2 CFR 200.303, The non-Federal entity must: (a) Establish and maintain effective internal control over 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 of the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: While performing audit procedures, it was noted that NWILCS did not file the required annual report that was due during the audit period. Questioned costs: None. Context: During audit testing, it was noted that the annual reporting was not completed by NWILCS as required during the audit period. Cause: The reporting requirement was missed due to management’s oversight. Effect: NWILCS has not fully followed compliance attributes with the reporting requirements set forth by the Compliance Supplement. Personnel need to reinforce policies to ensure control procedures are in place to ensure all required grant compliance items are reviewed, approved, and completed in accordance with grant requirements. Repeat finding: No. Recommendation: We recommend that NWILCS implement procedures and controls to ensure the required reports are accurate and completed timely. Views of responsible officials: There is no disagreement with the audit finding.