Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (CSLFRF Program) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP4316 - 2024, SLFRP0126 - 2024 Pass-Through Agency: Colorado Department of Local Affairs Pass-Through Number(s): CMS # 186974, CMS# 187546 Award Period: 03/03/2021 – 12/31/2026; 8/1/2024 – 6/30/2026 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 2 CFR Section 180, non-Federal entities receiving Federal awards must verify that lower-tier entities, as defined in 2 CFR Section 180.995, are not suspended, debarred, or otherwise excluded from participating in transactions. Per 2 CFR 200.303, non-federal entities receiving federal awards 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 comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During testing over suspension and debarment, it was noted that proof of suspension and debarment verification could not be found for 6 out of 19 selections tested. Questioned costs: None. Context: Although verification records were not maintained, through audit procedures, it was confirmed that the 6 contractors were not suspended or debarred through checking the System for Award Management (SAM.gov) exclusions list. The City has an existing suspension and debarment policy, however, the unique nature of the funding and award segregation led to unclear compliance responsibilities among agencies at the City. Cause: The CSLFRF funds were distributed across multiple agencies at the City, making the responsibility for suspension and debarment verification unclear. Additionally, the contractors in question are also used for various non-federal projects within the City. Effect: Failure to perform suspension and debarment verification procedures before the procurement of good or services could result in the payment of federal funds to contractors that are ineligible to participate in federal assistance programs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the City incorporate specific language into its existing procurement process—particularly regarding suspension and debarment requirements—by clearly assigning responsibility for conducting these checks to the agency receiving and overseeing the federal award, both prior to any federal spending and on a recurring basis thereafter. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Treasury Federal Program Name: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (CSLFRF Program) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP4316 - 2024, SLFRP0126 - 2024 Pass-Through Agency: Colorado Department of Local Affairs Pass-Through Number(s): CMS # 186974, CMS# 187546 Award Period: 03/03/2021 – 12/31/2026; 8/1/2024 – 6/30/2026 Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: According to 2 CFR Section 180, non-Federal entities receiving Federal awards must verify that lower-tier entities, as defined in 2 CFR Section 180.995, are not suspended, debarred, or otherwise excluded from participating in transactions. Per 2 CFR 200.303, non-federal entities receiving federal awards 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 comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During testing over suspension and debarment, it was noted that proof of suspension and debarment verification could not be found for 6 out of 19 selections tested. Questioned costs: None. Context: Although verification records were not maintained, through audit procedures, it was confirmed that the 6 contractors were not suspended or debarred through checking the System for Award Management (SAM.gov) exclusions list. The City has an existing suspension and debarment policy, however, the unique nature of the funding and award segregation led to unclear compliance responsibilities among agencies at the City. Cause: The CSLFRF funds were distributed across multiple agencies at the City, making the responsibility for suspension and debarment verification unclear. Additionally, the contractors in question are also used for various non-federal projects within the City. Effect: Failure to perform suspension and debarment verification procedures before the procurement of good or services could result in the payment of federal funds to contractors that are ineligible to participate in federal assistance programs.Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the City incorporate specific language into its existing procurement process—particularly regarding suspension and debarment requirements—by clearly assigning responsibility for conducting these checks to the agency receiving and overseeing the federal award, both prior to any federal spending and on a recurring basis thereafter. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Child Care and Development Block Grant and Child Care Mandatory and Matching Funds of the Child Care and Development Fund (Child Care and Development Fund Cluster) Assistance Listing Number: 93.575 and 93.596 Federal Award Identification Number and Year: 2101COCCC5, 2101COCDC6, 2301COCCDD, 2302COCCDD, 2402COCCDD, 2302COCCDF, 2402COCCDF, 2301COCCDF, 2302COCCDF Pass-Through Agency: Colorado Department of Human Services Pass-Through Number(s): None provided Award Period: 10/1/2022 – 9/30/2026; 10/1/2023 – 9/30/2026, 7/1/2023 – 6/30/2024 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure terminated employees are removed from the State system within a reasonable timeframe. Condition: During our testing, we noted 1 employee out of 3 employees selected for testing whose user access rights were not removed from the Colorado Benefits Management System (CBMS) within a reasonable timeframe after employment change at the City. Questioned costs: None. Context: During our evaluation of terminated users within CBMS, we identified a lack of compensating control for timely removal of employees due to IT Department turnover. One employee terminated in 2023 did not have their access formally revoked until February 2025. However, CBMS passwords are automatically locked after 30 days, disabled after 60 days, and deactivated after 90 days. Login records confirmed no system access post-termination. Cause: The City experienced turnover and did not have a compensating control to ensure that CBMS user access rights are revoked when employees separate from the City or change departments that do not require them to keep their CBMS access.Effect: Employees who are terminated or no longer require access to the system, who continue to have access after termination, could make changes within CBMS that impact the City’s federal program activities. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement a control to ensure the CBMS user access rights are offboarded timely when employees separate employment or move departments that do not require them to keep CBMS access. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Child Care and Development Block Grant and Child Care Mandatory and Matching Funds of the Child Care and Development Fund (Child Care and Development Fund Cluster) Assistance Listing Number: 93.575 and 93.596 Federal Award Identification Number and Year: 2101COCCC5, 2101COCDC6, 2301COCCDD, 2302COCCDD, 2402COCCDD, 2302COCCDF, 2402COCCDF, 2301COCCDF, 2302COCCDF Pass-Through Agency: Colorado Department of Human Services Pass-Through Number(s): None provided Award Period: 10/1/2022 – 9/30/2026; 10/1/2023 – 9/30/2026, 7/1/2023 – 6/30/2024 Compliance Requirement: Eligibility Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures in place to ensure terminated employees are removed from the State system within a reasonable timeframe. Condition: During our testing, we noted 1 employee out of 3 employees selected for testing whose user access rights were not removed from the Colorado Benefits Management System (CBMS) within a reasonable timeframe after employment change at the City. Questioned costs: None. Context: During our evaluation of terminated users within CBMS, we identified a lack of compensating control for timely removal of employees due to IT Department turnover. One employee terminated in 2023 did not have their access formally revoked until February 2025. However, CBMS passwords are automatically locked after 30 days, disabled after 60 days, and deactivated after 90 days. Login records confirmed no system access post-termination. Cause: The City experienced turnover and did not have a compensating control to ensure that CBMS user access rights are revoked when employees separate from the City or change departments that do not require them to keep their CBMS access.Effect: Employees who are terminated or no longer require access to the system, who continue to have access after termination, could make changes within CBMS that impact the City’s federal program activities. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City implement a control to ensure the CBMS user access rights are offboarded timely when employees separate employment or move departments that do not require them to keep CBMS access. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-08-0005, 2019; B-20-MC-08-0005, 2020; B-21- MC-08-0005, 2021; B-20-MW-08-0005, 2020 Pass-Through Agency: None Pass-Through Number(s): N/A Award Period: 1/1/2019-9/1/2031 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Under 2 CFR Part 170, recipients of federal awards are required to report subaward information to ensure transparency and accountability in the use of federal funds. This regulation, which implements the Federal Funding Accountability and Transparency Act of 2006 (as amended by the Digital Accountability and Transparency Act of 2014), mandates that recipients submit accurate data to the Federal Subaward Reporting System (FSRS) for publication on USAspending.gov. Specifically, 2 CFR Part 200, Part 3-L – Reporting specifically states: “…(b) Compare the award information accessed in step 2.a to the subaward/subcontract documents maintained by the recipient to assess if— (i) applicable subaward obligations /modifications have been reported, (ii) the key data elements (see above) were accurately reported and are supported by the source documentation, and (iii) the action was reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made.” Further, 2 CFR Part 200 § 200.303 requires non-Federal entities to: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.Condition: We were unable to obtain evidence confirming the timely submission of two out of six reports reviewed. Additionally, the review process for these reports was not formally documented, and no records of the review were retained. Questioned costs: None. Context: During testing of FFATA report submissions for six subawards, we identified two instances where the awards were obligated in November 2023, but the corresponding FFATA reports were not submitted until January 11, 2024, and January 17, 2024, eleven and seventeen dates after the due date, respectively. While the content of the reports appeared appropriate, the submissions were not timely. Additionally, there was no concrete documentation of the review process either before or after submission. Transactions Tested Subaward not reported Timeliness of report unable to be determined Subaward amount incorrect1 Subaward missing key elements1 6 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Timeliness of report unable to be determined Subaward amount incorrect11 Subaward missing key elements $1,436,927 $0 $911,927 $0 $0 Cause: The City experienced staff turnover within the Denver Economic Development & Opportunity department, and the individuals responsible for submitting the reports are no longer employed. Additionally, the City lacked a formal process to document submission dates and retain evidence of report review and approval. Effect: Failure to submit the subaward reports to FSRS in a timely manner places the Department out of compliance with federal reporting requirements and exposes it to potential federal sanctions. Additionally, the absence of documented review and approval processes undermines accountability and makes it difficult to verify compliance, increasing the risk of further scrutiny or penalties from oversight bodies. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City establish and implement a formal process to consistently retain documentation of FFATA report submission dates, as well as evidence of the review and approval of each report submitted. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Community Development Block Grants/Entitlement Grants Assistance Listing Number: 14.218 Federal Award Identification Number and Year: B-19-MC-08-0005, 2019; B-20-MC-08-0005, 2020; B-21- MC-08-0005, 2021; B-20-MW-08-0005, 2020 Pass-Through Agency: None Pass-Through Number(s): N/A Award Period: 1/1/2019-9/1/2031 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Under 2 CFR Part 170, recipients of federal awards are required to report subaward information to ensure transparency and accountability in the use of federal funds. This regulation, which implements the Federal Funding Accountability and Transparency Act of 2006 (as amended by the Digital Accountability and Transparency Act of 2014), mandates that recipients submit accurate data to the Federal Subaward Reporting System (FSRS) for publication on USAspending.gov. Specifically, 2 CFR Part 200, Part 3-L – Reporting specifically states: “…(b) Compare the award information accessed in step 2.a to the subaward/subcontract documents maintained by the recipient to assess if— (i) applicable subaward obligations /modifications have been reported, (ii) the key data elements (see above) were accurately reported and are supported by the source documentation, and (iii) the action was reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made.” Further, 2 CFR Part 200 § 200.303 requires non-Federal entities to: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.Condition: We were unable to obtain evidence confirming the timely submission of two out of six reports reviewed. Additionally, the review process for these reports was not formally documented, and no records of the review were retained. Questioned costs: None. Context: During testing of FFATA report submissions for six subawards, we identified two instances where the awards were obligated in November 2023, but the corresponding FFATA reports were not submitted until January 11, 2024, and January 17, 2024, eleven and seventeen dates after the due date, respectively. While the content of the reports appeared appropriate, the submissions were not timely. Additionally, there was no concrete documentation of the review process either before or after submission. Transactions Tested Subaward not reported Timeliness of report unable to be determined Subaward amount incorrect1 Subaward missing key elements1 6 0 2 0 0 Dollar Amount of Tested Transactions Subaward not reported Timeliness of report unable to be determined Subaward amount incorrect11 Subaward missing key elements $1,436,927 $0 $911,927 $0 $0 Cause: The City experienced staff turnover within the Denver Economic Development & Opportunity department, and the individuals responsible for submitting the reports are no longer employed. Additionally, the City lacked a formal process to document submission dates and retain evidence of report review and approval. Effect: Failure to submit the subaward reports to FSRS in a timely manner places the Department out of compliance with federal reporting requirements and exposes it to potential federal sanctions. Additionally, the absence of documented review and approval processes undermines accountability and makes it difficult to verify compliance, increasing the risk of further scrutiny or penalties from oversight bodies. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the City establish and implement a formal process to consistently retain documentation of FFATA report submission dates, as well as evidence of the review and approval of each report submitted. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Finding – Federal Award Type: Financial Reporting – Material Weakness in Internal Control over Compliance. Identification of Federal Program: AL Number: 15.507 WaterSMART Criteria / Requirement: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards 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 awards. Condition / Context: It was noted during the audit that there were insufficient internal controls over financial reports submitted, as there was not sufficient documentation of review of the financial report prior to the submission. Cause: Procedures were not in place to ensure that Deschutes Land Trust is maintaining adequate internal controls over compliance in regards to financial reporting requirements. Key duties and functions are not segregated among organization personnel and internal control policies and procedures are inadequate to properly define the roles and responsibilities of personnel performing key functions. Effect: Failure to maintain sufficient internal controls over financial reporting related to federal grants may result in inaccurate reporting and/or non‐compliance with the provisions of applicable requirements. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding financial reporting over federal grants, which include proper segregation of duties.
Assistance Listing, Federal Agency, and Program Name - ALN 21.027, U.S. Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Federal Award Identification Number and Year - FAIN not available, 2022 Pass through Entity - N/A Direct funded Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control 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 City did not have controls in place surrounding the review of annual performance reporting. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - As the City received less than $10 million of CSLFRF funding, the City is required to submit an annual report for the program and have controls in place to ensure the report is filed on time and no errors in reporting occur. During the review of internal controls over the annual performance report required by the program, the City was unable to produce evidence of a secondary review of the annual report before or after submission; however, the report was filed on time and no errors in reporting were noted as a result of our audit procedures. Cause and Effect - Due to significant staff turnover at the City, the City did not have controls in place over reporting for this grant. The lack of countrols could have resulted in material misstatements to the reports filed with the funding agency. Recommendation - In order to ensure reporting requirements are met and that reports are accurate and filed timely, we recommend the City incorporate a formal review process of the reports. Views of Responsible Officials and Corrective Action Plan - The City agrees with this finding. The City is in the process of strengthening our formal grant review process for all reports to ensure accuracy and timeliness. See the corrective action plan.
Assistance Listing, Federal Agency, and Program Name - ALN 14.251, U.S. Department of Housing and Urban Development, Economic Development Initiative Special Project, Neighborhood Initiative and Miscellaneous Grants Federal Award Identification Number and Year - B-22-CP-CO-0158, 2022 Pass through Entity - N/A Direct funded Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control 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 City did not have controls in place surrounding the filing of semi annual performance and financial reports nor did it submit the required reports. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - According to the terms of the award, the City is required to submit a performance report to the granting agency on a semi annual basis and must include a completed Federal financial report as an attachment to each performance report. Cause and Effect - The City was unable to access the granting agency's web portal and, therefore, did not submit the required reports during the year. Recommendation - In order to ensure reporting requirements are met and that reports are accurate and filed timely, we recommend the City incorporate a formal review process of the reports. Views of Responsible Officials and Planned Corrective Actions - The City agrees with this finding. The City is in the process of strengthening our formal grant review process for all reports to ensure accuracy and timeliness. See the corrective action plan.
Assistance Listing, Federal Agency, and Program Name - 15.916, U.S. Department of the Interior, Outdoor Recreation, Acquisition, Development and Planning Federal Award Identification Number and Year - FAIN not available, 2024 Pass through Entity - Colorado Parks and Wildlife/Land and Water Conservation Fund Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control 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. Condition - The City did not have controls in place surrounding the review of requests for reimbursement to ensure the underlying invoices were allowable and that the local matching contribution was calculated correctly. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - The same individual at the City prepared and submitted the requests for reimbursement without a second person reviewing the request. The City submitted two requests for reimbursement during the year under audit with grant reimbursement amounts totalling $550,495. The City submitted a third request for reimbursement subsequent to the year under audit that included 2024 expenditures of federal awards in the amount of $653,591. Cause and Effect - The City did not have a policy in place to ensure an individual in the finance department reviewed the requests for reimbursement prepared by department staff; however, no unallowable costs, incorrect matching calculations, or inappropriate reimbursement requests were noted as a result of our audit procedures. Recommendation - We recommend the City implement a process to ensure all requests for reimbursement are reviewed prior to submission. Views of Responsible Officials and Planned Corrective Actions - The City agrees with this finding. The grant accountant is revising our grant regulations and requirements to improve our internal controls and processes. Part of this update will include a requirement that all RFRs prepared by departments are forwarded to the Finance department for review and approval prior to submission. See the corrective action plan.
Federal Agency: Department of Health and Human Services Federal Program Title: Title IV-E Foster Care Assistance Listing Number: 93.658 Pass-Through Agency: Four Oaks Family & Children Pass-Through Number(s): FWBP-CPS-24-002 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significancy Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Section 200.303 requires entities to establish and maintain effective internal controls over Federal Awards. Condition: During our testing we noted internal controls over drawdown requests were not always properly followed. Questioned Costs: None Context: 1 of 3 drawdown requests in our sample were missing approvals. Cause: LSI has a limited number of individuals in the finance department and has experienced significant turnover in the finance department. Effect: The lack of internal controls over cash management provides an opportunity for noncompliance. Repeat Finding: Yes – see 2023-003 Recommendation: We recommend LSI design controls to ensure an adequate review process is in place for all drawdown requests. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: Department of Health and Human Services Federal Program Title: Title IV-E Foster Care Assistance Listing Number: 93.658 Pass-Through Agency: Four Oaks Family & Children Pass-Through Number(s): FWBP-CPS-24-002 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significancy Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Section 200.303 requires entities to establish and maintain effective internal controls over Federal Awards. Condition: During our testing we noted internal controls over drawdown requests were not always properly followed. Questioned Costs: None Context: 1 of 3 drawdown requests in our sample were missing approvals. Cause: LSI has a limited number of individuals in the finance department and has experienced significant turnover in the finance department. Effect: The lack of internal controls over cash management provides an opportunity for noncompliance. Repeat Finding: Yes – see 2023-003 Recommendation: We recommend LSI design controls to ensure an adequate review process is in place for all drawdown requests. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: Department of Health and Human Services Federal Program Title: Title IV-E Foster Care Assistance Listing Number: 93.658 Pass-Through Agency: Four Oaks Family & Children Pass-Through Number(s): FWBP-CPS-24-002 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significancy Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Section 200.303 requires entities to establish and maintain effective internal controls over Federal Awards. Condition: During our testing we noted internal controls over drawdown requests were not always properly followed. Questioned Costs: None Context: 1 of 3 drawdown requests in our sample were missing approvals. Cause: LSI has a limited number of individuals in the finance department and has experienced significant turnover in the finance department. Effect: The lack of internal controls over cash management provides an opportunity for noncompliance. Repeat Finding: Yes – see 2023-003 Recommendation: We recommend LSI design controls to ensure an adequate review process is in place for all drawdown requests. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: Department of Health and Human Services Federal Program Title: Unaccompanied Children Program Assistance Listing Number: 93.676 Pass-Through Agency: Global Refuge Pass-Through Number(s): 90ZU0521-01, 02 & 90ZU0439-02, 03 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Section 200.303 requires entities to establish and maintain effective internal controls over Federal Awards. Condition: During our testing we noted internal controls over disbursements were not always properly followed. Questioned Costs: None Context: 1 of the 54 period of performance selections in our sample did not have timesheet approvals. Cause: LSI has a limited number of individuals in the finance department and has experienced significant turnover in the finance department. Effect: The auditor noted no instances of noncompliance with the allowability of costs or support for costs; the lack of internal controls over disbursements provides an opportunity for noncompliance. Repeat Finding: Yes – see 2023-005 Recommendation: We recommend LSI design controls to ensure an adequate review process is in place for all disbursements. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: Department of Health and Human Services Federal Program Title: Unaccompanied Children Program Assistance Listing Number: 93.676 Pass-Through Agency: Global Refuge Pass-Through Number(s): 90ZU0521-01, 02 & 90ZU0439-02, 03 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Section 200.303 requires entities to establish and maintain effective internal controls over Federal Awards. Condition: During our testing we noted internal controls over disbursements were not always properly followed. Questioned Costs: None Context: 1 of the 54 period of performance selections in our sample did not have timesheet approvals. Cause: LSI has a limited number of individuals in the finance department and has experienced significant turnover in the finance department. Effect: The auditor noted no instances of noncompliance with the allowability of costs or support for costs; the lack of internal controls over disbursements provides an opportunity for noncompliance. Repeat Finding: Yes – see 2023-005 Recommendation: We recommend LSI design controls to ensure an adequate review process is in place for all disbursements. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: Department of Health and Human Services Federal Program Title: Unaccompanied Children Program Assistance Listing Number: 93.676 Pass-Through Agency: Global Refuge Pass-Through Number(s): 90ZU0521-01, 02 & 90ZU0439-02, 03 Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Section 200.303 requires entities to establish and maintain effective internal controls over Federal Awards. Condition: During our testing we noted internal controls over disbursements were not always properly followed. Questioned Costs: None Context: 1 of the 54 period of performance selections in our sample did not have timesheet approvals. Cause: LSI has a limited number of individuals in the finance department and has experienced significant turnover in the finance department. Effect: The auditor noted no instances of noncompliance with the allowability of costs or support for costs; the lack of internal controls over disbursements provides an opportunity for noncompliance. Repeat Finding: Yes – see 2023-005 Recommendation: We recommend LSI design controls to ensure an adequate review process is in place for all disbursements. Views of Responsible Officials: There is no disagreement with the audit finding.
2024 – 002: Suspension and Debarment: Federal Agency: U.S. Department of Treasury, Federal Program Name: COVID-19 State and Local Fiscal Recovery Funds, Assistance Listing Number: 21.027, Federal Award Identification Number and Year: SLRFP0410 – 2024, Award Period: January 1, 2024 – December 31, 2024, Type of Finding: Significant Deficiency in Internal Control over Compliance; Other Matter Criteria or specific requirement: 2 CFR § 180.300 requires that before the County enters into a covered transaction with an entity at a lower tier, the County must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 requires that the entity have sufficient controls over compliance related to federal awards. Condition: During our testing, we noted an instance where there was no documentation of this verification being performed. Questioned costs: None Context: During our testing, it was noted that one of six contracts that were tested were entered into without the County verifying and retaining documentation of said verification that the vendor was not suspended or debarred by the federal government. Cause: The County was unaware this type of contract met the criteria applicable for suspension and debarment. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, suspension, and debarment; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No. Recommendation: We recommend the County ensure that this suspension and debarment verification occurs before entering covered transactions and that supporting documentation of this internal control is retained. Views of responsible officials: Management does not disagree with the finding.
Finding 2024-002: U.S. Department of the Treasury Federal Financial Assistance Listing 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Controls 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 reports submitted to the Department of Treasury were not reviewed and approved by a separate individual outside of the preparer. Cause: The County did not have an internal control process in place to ensure a secondary review and approval of the reports submitted to the Department of Treasury were performed by someone other than the preparer of the report. Effect: Without a secondary review and approval, there is a possibility that the report may not be accurately completed. Questioned Costs: None. Context / Sampling: For the Coronavirus State and Local Fiscal Recovery Funds, only one annual report was required to be filed. We tested the one annual report filed. Repeat Finding from Prior Year: Yes Recommendation: We recommend the County implement a control process which includes a secondary review and approval of the required reports to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the noted finding. Refer to Corrective Action Plan.
2024 001 Activities Allowed or Unallowed and Allowable Costs/Cost Principles U.S. Department of Homeland Security: Passed through the State of New Jersey, Department of Law and Public Safety: Disaster Grants – Public Assistance (Presidentially Declared Disasters) – ALN 97.036 Federal Grant Numbers and Years State of New Jersey pass through number: UH1WX Project #2365 – Award Year 2024 (Application 696220) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Prior Year Findings: 2023-001 Criteria Compliance – Program Specific The Federal Emergency Management Agency (FEMA), as part of the U.S. Department of Homeland Security, evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. (PAPPG v4) Chapter 4, page(s) 51 54; Chapter 6, page(s) 65 & 93 95. Cost must be: • Directly tied to the performance of eligible work; • Adequately documented (2 CFR section 200.403(g)); • Reduced by all applicable credits, such as insurance proceeds and salvage values (Stafford Act section 312, 42 USC section 5155, and 2 CFR section 200.406); • Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations; • Consistent with applicant’s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant; and • Necessary and reasonable to accomplish the work properly and efficiently (2 CFR section 200.403). 1. Applicant (Force Account) Labor FEMA refers to the applicant’s personnel as “force account.” FEMA reimburses force account labor based on actual hourly rates plus the cost of the employee’s actual fringe benefits. FEMA calculates the fringe benefit cost based on a percentage of the hourly pay rate. Because certain items in a benefit package are not dependent on hours worked (e.g., health insurance), the percentage for overtime is usually different than the percentage for straight time. Compliance – General Per 2 CFR Section 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non federal entity; (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 federally 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. Internal Control Per 2 CFR section 200.303(a), a 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 and Context The New Jersey Turnpike Authority (the “Authority”), through the State of New Jersey, Department of Homeland Security (the State), administers the federal Disaster Grants – Public Assistance (Presidentially Declared Disasters) program and is reimbursed for eligible expenditures when a presidentially declared disaster occurs. For the Authority’s force account labor costs, the Authority utilizes manual Daily Worksheets (timesheets) as the official records for time and effort worked during an event by the Authority’s personnel. These timesheets are then entered into the Authority’s information system (PeopleSoft) for review and approval, reconciling back to the information entered on the respective timesheet. For thirteen of sixty timesheets selected for testwork, the Authority was unable to provide the timesheets as the official record for the time and effort charged to the federal program. However, the Authority successfully demonstrated through PeopleSoft system that the time and effort charged to the federal program was properly reviewed and approved and reconciled to the amounts of reimbursement requested from the State. The finding is recurring from the prior year as the corrective action plan developed by the Authority from the prior year finding was not implemented until December 2024, which is subsequent to when these expenditures were incurred by the Authority between fiscal years 2020 and 2022. Cause The Authority did not maintain and make readily available certain timesheets used as the official record for the time and effort charged to the federal program in accordance with the Uniform Guidance. Effect The Authority did not comply with 2 CFR Section 200.430 related to incorporating the physical timesheets into the official records of the Authority. Questioned Costs None as the time and effort amounts charged were determined to be allowable. Recommendation We recommend that the Authority strengthen its processes to ensure that all timesheets for disaster related events that are federally funded are maintained and are made readily available if subject to audit or other inspection in accordance with the Uniform Guidance. Views of Responsible Officials Management agrees with the finding. Beginning in December 2024, as a commitment to strengthen our processes and ensure that all physical timesheets related to FEMA-declared disaster events are properly maintained and readily accessible, management put a process in place to enhance procedures and controls for timesheets going forward to ensure full compliance with the Uniform Guidance requirements. This process was successfully implemented as of this date and for prospective periods. However, this process does not remedy the issue noted in the finding which relates to time worked from 2020-2022, which is before the process was in place. Therefore, the finding is repeated from the prior year.
Suspension and Debarment Prior Year Finding Number: 2023-003 Year of Finding Origination: 2023 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Federal requirements prohibit non-federal entities from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Title 2 U.S. Code of Federal Regulations § 180.300 describes a required verification process. Prior to entering into the transaction, one of the following must be performed: (1) checking SAM.gov exclusions, (2) collecting a certification, or (3) adding a clause or condition to the covered transaction. The City’s procurement policy requires a suspension and debarment clause be included in the contract and also requires the contract manager to verify the vendor is not suspended, debarred, or otherwise excluded at SAM.gov. Condition: The City did not maintain documentation of the verification that the vendor was not suspended or debarred at SAM.gov for one of 14 transactions tested. Questioned Costs: None. Context: 134 covered transactions were subject to suspension and debarment requirements. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City is not in compliance with federal regulations. Cause: The contract managers did not know verification of suspension and debarment using the federal listing was required. Recommendation: We recommend the City review its written policies and procedures and communicate with contract managers their responsibility for complying with the federal regulations and maintaining documentation to support that compliance. View of Responsible Official: Acknowledge
Subrecipient Monitoring Prior Year Finding Number: N/A Year of Finding Origination: 2024 Type of Finding: Internal Control Over Compliance and Compliance Severity of Deficiency: Significant Deficiency and Other Matter Federal Agency: U.S. Department of the Treasury Program: 21.027 COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Award Number and Year: SLT0790; 2021 Pass-Through Agency: N/A – Direct Criteria: Title 2 U.S. Code of Federal Regulations § 200.303 states that the auditee must establish and maintain effective internal control over the federal award that provides reasonable assurance that the auditee is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Title 2 U.S. Code of Federal Regulations § 200.332 includes requirements such as evaluating the subrecipient’s risk of noncompliance with federal statutes, regulations, and the terms and conditions of the award. Condition: The City did not have documentation of risk assessment procedures performed for two of the four subrecipients tested. Questioned Costs: None. Context: The City of Minneapolis has documented the subaward and subrecipient procedures that its staff are expected to follow. These procedures include the completion of a pre-award risk assessment form and for the form to be maintained in the contract file of the subrecipient. The sample size was based on guidance from Chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Effect: The City is not in compliance with federal regulations. Cause: City staff were not aware of the requirement to perform pre-award risk assessments with subrecipients. Recommendation: We recommend the City ensure that the City’s employees follow its procedures for completing risk assessments when contracting with subrecipients. View of Responsible Official: Concur
U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds - 21.027 Criteria or Specific Requirement - Suspension and Debarment and Material Weakness In accordance with 2 CFR 200.214, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. In accordance with 2 CFR Section 180.300, when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Per 2 CFR 200.303, the non-Federal entities receiving federal awards (i.e., auditee management) establish and maintain internal control design to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition - Suspension and debarment checks were not completed for a vendor prior to entering into a contract. Cause - The City's controls to ensure suspension and debarment checks on vendors receiving federal funds did not operate effectively. Effect - Federal funds could be paid to entities that are suspended or debarred. Questioned Costs - None noted, as the vendor was reviewed and determined to not be suspended or debarred. Context - The City only entered into one contract during the year ended December 31, 2024 that was considered a "covered transaction" and spent approximately $540,000 under this contract. This single contract was selected for testing suspension and debarment and uncovered the City did not check the vendor's suspension and debarment status prior to purchase. The City completed the suspsension and debarment check subsequent to purchase and verified the vendor was not suspended or disbarred. Identification as a Repeat Finding, if applicable - None noted. Recommendation - Policies and procedures should be modified to ensure that suspension and debarment checks are performed on vendors prior to making purchases with federal funds. View of Responsible Official and Planned Corrective Actions - Management agrees with the stated finding and has implemented a corrective action plan.
2024 – 001 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/24 - 12/31/24 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement According to § 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. According to 2 CFR 200.1 Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition and Context The Organization began allocating direct salaries and benefits prior to the awards period of performance start date. The Organization allocated expenditures based on the payroll paid date, rather than the date the payroll was incurred. Total direct salaries and benefits allocated to the grant prior to the period of performance start date was $21,049. Effect Potential that costs will be charged to the grant outside of the period of performance. Questioned Costs $21,049 Cause The Organization allocated payroll expenditures based on the paid date, rather than the incurred date. Recommendation We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.Views of Responsible Officials The Organization corrected the period of performance finding prior to the 2024 audit being completed and feel this was an isolated incident. The issue was caused by staff turnover in 2024, and new staff have been properly trained to review all grants to ensure compliance with all grant regulations. This grant can be used for staffing costs and upon identification of this issue we have corrected the allocations to the prior grant periods. Going forward, the Organization has implemented controls to ensure that all staff are being trained to ensure they are following grant guidelines.
2024 – 001 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/24 - 12/31/24 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement According to § 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. According to 2 CFR 200.1 Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition and Context The Organization began allocating direct salaries and benefits prior to the awards period of performance start date. The Organization allocated expenditures based on the payroll paid date, rather than the date the payroll was incurred. Total direct salaries and benefits allocated to the grant prior to the period of performance start date was $21,049. Effect Potential that costs will be charged to the grant outside of the period of performance. Questioned Costs $21,049 Cause The Organization allocated payroll expenditures based on the paid date, rather than the incurred date. Recommendation We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.Views of Responsible Officials The Organization corrected the period of performance finding prior to the 2024 audit being completed and feel this was an isolated incident. The issue was caused by staff turnover in 2024, and new staff have been properly trained to review all grants to ensure compliance with all grant regulations. This grant can be used for staffing costs and upon identification of this issue we have corrected the allocations to the prior grant periods. Going forward, the Organization has implemented controls to ensure that all staff are being trained to ensure they are following grant guidelines.
2024 – 001 Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program: Consolidated Health Centers Grant AL Number: 93.224 & 93.527 Award Period: 1/1/24 - 12/31/24 Type of Finding: Significant deficiency in Internal Control over Compliance and Compliance Criteria or Specific Requirement According to § 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. According to 2 CFR 200.1 Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition and Context The Organization began allocating direct salaries and benefits prior to the awards period of performance start date. The Organization allocated expenditures based on the payroll paid date, rather than the date the payroll was incurred. Total direct salaries and benefits allocated to the grant prior to the period of performance start date was $21,049. Effect Potential that costs will be charged to the grant outside of the period of performance. Questioned Costs $21,049 Cause The Organization allocated payroll expenditures based on the paid date, rather than the incurred date. Recommendation We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.Views of Responsible Officials The Organization corrected the period of performance finding prior to the 2024 audit being completed and feel this was an isolated incident. The issue was caused by staff turnover in 2024, and new staff have been properly trained to review all grants to ensure compliance with all grant regulations. This grant can be used for staffing costs and upon identification of this issue we have corrected the allocations to the prior grant periods. Going forward, the Organization has implemented controls to ensure that all staff are being trained to ensure they are following grant guidelines.
FINDING 2024-001 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Reporting Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): FY 2024 Compliance Requirement: Reporting Audit Finding: Significant Deficiency INDIANA STATE BOARD OF ACCOUNTS 13 LAGRANGE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system, which would include segregation of duties, was not in place at the County in order to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirement. Recipients are required to quarterly or annually submit Project and Expenditure (P&E) reports to the U.S. Department of the Treasury (Treasury). The reporting periods, as well as the respective due dates, are based upon type of recipient and its population, as well as the recipient's allocation amount. Information to be reported includes projects funded, expenditures, and contracts for the appropriate reporting period. The County was classified as a metropolitan county with a population below 250,000 residents that received an allocation of less than $10 million in COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) funding. As such, the initial P&E report, covering April 1, 2023 to March 31, 2024, was required to be submitted to the Treasury by April 30, 2024. The County submitted the annual P&E report during the audit period. The County's process for the completion and submission of the P&E reports was that the County Auditor prepared the P&E report based on the County's financial ledgers without a proper oversight or review process in place prior to submission. The lack of internal controls was a systemic issue 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). . . ." Cause A proper system of internal controls was not designed or implemented by management of the County to ensure that P&E reports were prepared by one individual and reviewed by another individual before submission to the Treasury. Effect Without the proper implementation of an effectively designed system of internal controls, errors could occur and remain undetected. As such, the County cannot ensure that the reports submitted are materially accurate and correct. INDIANA STATE BOARD OF ACCOUNTS 14 LAGRANGE COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a system of internal controls and develop policies and procedures over the preparation and review of federal reports to ensure appropriate reviews, approval, and oversight are taking place. Additionally, management should develop policies and procedures to ensure that the County provides the Treasury with complete and accurate information for all reports. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Additionally, per 2 CFR §200.403 and §200.302, costs charged to federal awards must be allowable, allocable, and properly documented, and financial reporting must be accurate, complete, and supported by the accounting system. Condition: Although the Parish has implemented internal controls related to the allowability of costs and the preparation of required reports for the Coronavirus State and Local Fiscal Recovery funds, they were not operating effectively during fiscal year 2024. Tests of controls indicated that transactions were not tracked appropriately to ensure they were charged to the correct funding source. In addition, quarterly project and expenditure reports submitted to the U.S. Treasury included inaccurate or unsupported information due to a lack of tracking and reconciliation procedures. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: While no instances of noncompliance were noted, the lack of documented controls in practice increases the risk that future required reports could be incomplete, inaccurate, or untimely, as well as, federal costs being unallowed per the cost principles which could potentially result in program noncompliance. Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001, to prevent noncompliance of the Uniform Guidance as required.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: In accordance with 2 CFR § 200.331, a non-federal entity that passes federal awards to subrecipients is responsible for 1) evaluating each subrecipient’s risk of noncompliance, 2) monitoring the activities of subrecipients to ensure that the subaward is used for authorized purposes, in compliance with laws and the terms and conditions of the subaward, and 3) verifying that subrecipients have audits in accordance with the Uniform Guidance, if applicable. Adequate internal controls are required to ensure compliance with these requirements under 2 CFR § 200.303. Condition: During our audit, we noted that the Parish did not have sufficient internal controls in place to ensure effective subrecipient monitoring. Specifically, there was no documented risk assessment of subrecipients prior to issuing subawards, the Parish did not perform periodic reviews or site visits to monitor subrecipient performance or compliance, and the subrecipient audit reports were not consistently obtained or reviewed. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions. The documented controls were not in practice because of this. Effect: Failure to properly monitor subrecipients increases the risk that federal funds may be misused or not spent in accordance with program requirements to achieve program objectives. It also exposes the Parish to potential liability for questioned costs incurred by subrecipients to be repaid to the federal agency. Recommendation: We recommend that the entity establish and implement formal policies and procedures for subrecipient monitoring in accordance with 2 CFR § 200.331. This should include conducting and documenting pre-award risk assessments, developing a subrecipient monitoring plan (e.g., site visits, desk reviews), reviewing subrecipient performance and audit reports on a regular basis.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
Criteria: Per 2 CFR § 200.303(a), the non-Federal entity must establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the entity is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the awards. Condition: Although the Parish maintains an internal grants policy which documents internal controls, the policy is not up to date with current Federal requirements and is not as prescribed in the grants policy as required by the Uniform Guidance. Further, the policy did not cover all aspects of compliance pertaining to the federal programs the Parish facilitates. Cause: As discussed in item 2024-001, the Parish encountered several challenges during the transition of administration and key personnel during 2024. Effect: The Parish’s failure to document internal control procedures increases the risk of noncompliance with federal requirements, misstatement of financial reports, and potential misuse of federal funds. This also contributed to inaccurate and unsupported data reported on the Parish’s SEFA, noncompliance with Uniform Guidance reporting requirements, and a delay in preparing the financial statements and the issuance of the financial statement audit in a timely manner. Therefore, the Parish is not in compliance with the internal control compliance requirement per 2 CFR § 200.303(a). Recommendation: We recommend that the Parish enhance and document internal controls over financial reporting, as described in our recommendations described under item 2024-001.
FINDING 2024-002 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Procurement and Suspension and Debarment Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): Contract #65851 Pass-Through Entity: Schneck Medical Center Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-001. Condition and Context An effective internal control system was not in place at the City to ensure compliance with requirements related to the grant agreement and the Procurement and Suspension and Debarment compliance requirement. Procurement Federal regulations allow for informal procurement methods when the value of the procurement for property or services does not exceed the simplified acquisition threshold, which is customarily set at $250,000. However, Indiana Code 5-22-8 has a more restrictive threshold of $150,000 or less for when small purchase procedures may be used. This informal process allows for methods other than the formal bid process. The informal process is divided between two methods based on thresholds. Micro-purchases, typically for those purchases $10,000 or under, and small purchase procedures for those purchases above the micro-purchase threshold, but below the simplified acquisition threshold. Micro-purchases may be awarded without soliciting competitive price rate quotations. If small purchase procedures are used, then price or rate quotations must be obtained from an adequate number of qualified sources. One vendor was identified that fell within the small purchase threshold. Purchases from the vendor totaled $148,800. As such, price or rate quotations from an adequate number of qualified sources should have been obtained. However, the City did not obtain price or rate quotations for the purchases, nor was full and open competition provided for the vendor. Additionally, there was no documentation available to support the rationale to limit competition. INDIANA STATE BOARD OF ACCOUNTS 15 CITY OF SEYMOUR SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Suspension and Debarment Prior to entering into subawards and covered transactions with the COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (SLFRF) award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the Excluded Parties List System (EPLS), collecting a certification from that person, or adding a clause or condition to the covered transaction with that person. The City did not have policies or procedures in place for verifying that an entity with which it planned to enter into a covered transaction was not suspended, debarred, or otherwise excluded until November 25, 2024. One of the two vendors selected for testing, with covered transactions totaling $148,800, was not verified to ensure that the vendor was not suspended, debarred, or otherwise excluded. The lack of internal controls and noncompliance were systemic issues until the City implemented new policies and procedures in November 2024. 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 200.320 states in part: "The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319 for any of the following methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. (a) Informal procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in § 200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement of property or services at or below the SAT include: . . . (2) Small purchases — INDIANA STATE BOARD OF ACCOUNTS 16 CITY OF SEYMOUR SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Small purchase procedures. The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. . . . 31 CFR 19.300 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 do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or (b) Collecting a certification from that person if allowed by this rule; or (c) Adding a clause or condition to the covered transaction with that person." Cause The City did not have a procurement policy in place that contained the requirements of the procurement standards as outlined in the Code of Federal Regulations prior to entering into an agreement with the vendor. Due to the timing of the adoption of the City's Procurement and Suspension and Debarment Policy, which defines procedures to ensure they are properly procuring services and verifying suspension and debarment status for covered transactions, not all of the items selected for testing were in compliance. Effect Without the proper implementation of an effectively designed system of internal controls, the City cannot ensure that goods and services are appropriately procured and that contractors paid with federal funds are eligible to participate in federal programs. Any program funds the City used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Furthermore, noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended adhering to the newly implemented procurement policies to ensure compliance with state and federal laws and regulations for procuring goods and services paid with federal funds. We also recommended that management of the City adhere to its newly approved policy of internal controls to ensure that all contractors that are expected to be paid $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into covered transactions. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding #24-001 – Significant Deficiency in Internal Control over Financial Reporting: Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 200.303(a), a 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). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-002 – Significant Deficiency in Internal Control over Financial Reporting: Suspension & Debarment Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a 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). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Finding #24-002 – Significant Deficiency in Internal Control over Financial Reporting: Suspension & Debarment Program Names: 3rd Street Housing Project Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of internal controls over Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a 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). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services.
Finding #24-003 – Procurement Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: No formal Federal procurement policy has been adopted by the Town of Eagle, Colorado, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement standards set out at 2 CFR sections 200.303 and 200.318 through 200.326 within Uniform Guidance. Per 2 CFR section 200.303(a), a 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). UG §200.318 General Procurement Standards. (i) The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, section of contract type, contractor selection or rejection, and the basis for the contract price. UG §200.320 states that the non-Federal entity must use one of the prescribed methods of procurement: (a) Informal Procurement methods. When the value of the procurement for property or services under a Federal award does not exceed the simplified acquisition threshold (SAT), as defined in §200.1, or a lower threshold established by a non-Federal entity, formal procurement methods are not required. The non-Federal entity may use informal procurement methods to expedite the completion of its transactions and minimize the associated administrative burden and cost. The informal methods used for procurement or property or services at or below the SAT include: (1) Micro-purchases. Procurement by micro-purchase is the acquisition of supplies or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see definition of micro-purchase in §200.1). To the maximum extent practicable, the non-Federal entity should distribute micro-purchases equitably among qualified suppliers. Micro-purchases may be awarded without soliciting competitive price or rate quotations if the non-Federal entity considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly. Purchase cards can be used for micro-purchases if procedures are documented and approved by the non-Federal entity. (2) Small purchase. Procurement by small purchase is the acquisition of property or services, the aggregate dollar amount of which is greater than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. (b) Formal procurement methods. When the value of the procurement for property or services under a Federal financial assistance award exceeds the SAT, or a lower threshold established by a non-Federal entity, formal procurement methods are required. Formal procurement methods require following documented procedures. Formal procurement methods also require public advertising unless a non-competitive procurement can be used in accordance with §200.319 or paragraph (c) of this section. The following formal methods of procurement are used for procurement of property or services above the simplified acquisition threshold or a value below the simplified acquisition threshold the non-Federal entity determines to be appropriate: (1) Sealed Bids. Bids are publicly solicited, and a firm fixed-price contract (lump sum or unit price) is awarded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. (2) Proposals. Either a fixed price or cost-reimbursement-type contract is awarded. Proposals are generally used when conditions are not appropriate for the use of sealed bids. (c) Noncompetitive procurement. There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the allowed circumstances apply. Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, had not adopted a formal Federal procurement policy as outlined in 2CFR sections 200.303 and 200.318 through 200.326, during the course of our federal single audit testing of transactions and contracts, we found that the Town’s general contract purchase procedures that were followed meet the requirements of the Uniform Guidance and that no contracts were awarded without proper justification in 7 or 7 procurement transactions tested. Cause: Management was not aware of the requirement of adopting a formal Federal procurement policy under the procurement standards set out at 2CFR sections 200.303 and 200.318 through 200.626 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to procurement. Recommendation: We recommend that the Town of Eagle, Colorado, adopts a formal Federal procurement policy to include all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will adopt a formal Federal procurement policy which includes all elements identified in 2CFR Sections 200.303 and 200.318 through 200.626.
Finding #24-004 – Suspension & Debarment Program Names: 3rd Street Housing Project Eagle Community Pool Replacement CFDA Titles and Numbers: 21.027 Coronavirus State and Local Fiscal Recovery Funds Federal Agency: United States Treasury Pass-through Agency: Colorado Department of Local Affairs Award Year: December 31, 2024 Condition: The Town of Eagle, Colorado, does not have policies and procedures in place to ensure that they do not contract with or make awards to parties that are suspended or debarred, resulting in a lack of compliance with Federal procurement. Criteria or Specific Requirement: The Town of Eagle, Colorado, must comply with procurement, suspension & debarment standards set out at 2 CFR section 200.303 et al. within Uniform Guidance. Per 2CFR section 200.303(a), a 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). 2CFR 200.213 Suspension and Debarment restricts awards, subawards, and contracts within certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Questioned Costs: N/A Context: Although the Town of Eagle, Colorado, does not have policies or procedures in place to ensure that they do not contract with or make subawards to parties that are suspended or debarred, we did not identify any instances where Federal grant awards were paid to suspended or debarred vendors for 16 of 16 suspension and debarment transactions selected for testing. Cause: Management was not aware of the requirements for determining suspension and debarment status under 2CFR section 180 within Uniform Guidance. Effect: The Town of Eagle, Colorado, is at risk for noncompliance with Federal grants as it relates to suspension and debarment. Recommendation: We recommend that the Town of Eagle, Colorado, implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services. Views of Responsible Officials and Planned Corrective Action: Management agrees with this finding and will implement policies and procedures to ensure that potential vendors are not suspended or debarred prior to contracting with them for goods and services.