Finding Number: 2024-018 Prior Year Finding Number: 2023-022 Compliance Requirement: Reporting; Special Tests and Provisions – Penalty for Failure to Comply with Work Verification Plan Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/ Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.60 (a), “A State must report the actual hours that an individual participates in an activity, subject to the qualifications in paragraphs (b) and (c) of this section and Section 261.61(c). It is not sufficient to report the hours an individual is scheduled to participate in an activity. (b) For the purposes of calculating the work participation rates for a month, actual hours may include the hours for which an individual was paid, including paid holidays and sick leave. For participation in unpaid work activities, it may include excused absences for hours missed due to a maximum of 10 holidays in the preceding 12-month period and up to 80 hours of additional excused absences in the preceding 12-month period, no more than 16 of which may occur in a month, for each work-eligible individual. Each State must designate the days that it wishes to count as holidays for those in unpaid activities in its Work Verification Plan. It may designate no more than 10 such days. In order to count an excused absence as actual hours of participation, the individual must have been scheduled to participate in a countable work activity for the period of the absence that the State reports as participation. A State must describe its excused absence policies and definitions as part of its Work Verification Plan, specified at Section 261.62. (c) For unsubsidized employment, subsidized employment, and OJT, a State may report projected actual hours of employment participation for up to six months based on current, documented actual hours of work. Any time a State receives information that the client's actual hours of work have changed, or no later than the end of any six-month period, the State must re-verify the client's current actual average hours of work, and may report these projected actual hours of participation for another six-month period. (d) A State may not count more hours toward the participation rate for a self-employed individual than the number derived by dividing the individual's self-employment income (gross income less business expenses) by the Federal minimum wage. A State may propose an alternative method of determining self-employment hours as part of its Work Verification Plan. (e) A State may count supervised homework time and up to one hour of unsupervised homework time for each hour of class time. Total homework time counted for participation cannot exceed the hours required or advised by a particular educational program.” Per 45 CFR Section 261.61 (a), “A State must support each individual’s hours of participation with documentation in the case file. In accordance with Section 261.62, a State must describe in its Work Verification Plan the documentation it uses to verify hours of participation in each activity.” According to the DC State Verification Plan, the D.C. Department of Human Services (DHS), Department of Human Services Monitoring Unit reviews and audits all documentation submitted by vendors reflecting the activities of recipients in TANF Employment program. This documentation includes time sheets, activity logs, school records, pay stubs, and verification of employment, work experience and on-the-job training. The Monitoring Unit completes this audit process to determine if sufficient documentation exists to substantiate reported time and attendance data, to warrant a payment to TANF Employment program vendors, and submission of countable hours for federal reporting purposes. The District projects hours of participation in unsubsidized, self-employment for six months or until the recipient's next scheduled recertification, whichever is sooner. Per 45 CFR Section 265.7 (a)-(c), “Each State’s quarterly reports (the TANF Data Report, the TANF Financial Report (or Territorial Financial Report), and the SSP-MOE Data Report) must be complete and accurate and filed by the due date.” For disaggregated data report, ‘a complete and accurate report’ means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems, and include correction of the quarterly data by the end of the fiscal year reporting period; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data for all required elements (i.e., no data are missing); (4)(i) The State provides data on all families; or (ii) if the State opts to use sampling, the State reports data on all families selected in a sample that meets the specification and procedures in the TANF Sampling Manual (except for families listed in error); and (5) Where estimates are necessary (e.g., some types of assistance may require cost estimates), the State uses reasonable methods to develop these estimates. For an aggregated data report, “a complete and accurate report” means that: (1) The reported data accurately reflect information available to the State in case records, financial records, and automated data systems; (2) The data are free from computational errors and are internally consistent (e.g., items that should add to totals do so); (3) The State reports data on all applicable elements; and (4) Monthly totals are unduplicated counts for all families (e.g., the number of families and the number of out-of-wedlock births are unduplicated counts).” 45 CFR Section 265.7 (f) states that “States must maintain records to adequately support any report, in accordance with Section 75.361 through 75.370 of this title.” Condition – During our test work over a sample of 60 participants for Special Tests and Provisions - Penalty for Failure to Comply with Work Verification Plan and Reporting, we noted: • For six (6) instances, we noted that although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the average hours reported in CATCH. • For seven (7) instances, we noted that although participant work activity was adequately documented and properly supported by audited timesheets, the participant did not meet the work participation weekly hours requirement. In addition, for four (4) of these samples, we noted that the hours reported on the ACF-199 report do not agree with the average hours in CATCH. • For nine (9) instances, we noted that for a customer with unsubsidized employment, although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the projected hours per the support. • For ten (10) instances, we noted that although the reported hours met or exceeded the required hours, no documentation support was provided to support the ACF-199 report. • For one (1) instance, we noted that although the hours on the support provided met or exceeded the required hours and the hours reported in the ACF-199 report agree with the average hours reported in CATCH, the hours entered in CATCH should initially have been denied by TANF Office of Performance Monitoring and then re-entered by provider because the hours were entered incorrectly. • For one (1) instance, we noted that the number of audited hours per timesheet did not agree with the approved hours in CATCH. In addition, although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the actual hours per the CATCH support. • For one (1) instance, we noted that for a customer with unsubsidized employment, the support provided was for more than six months before the sample month. Therefore, the hours reported were not properly supported. In addition, although the hours reported on the ACF-199 report met or exceeded the required hours, the hours reported did not agree with the projected hours per the support. • For one (1) instance, we noted that although the hours reported in the ACF-199 report met or exceeded the required hours, a review of the Work documentation support provided detailing employment, noted no hours were included on the documentation. Therefore, the hours reported and projected were not supported. The information tested in our sample represents the underlying data used in Reporting for the 2nd and 4th quarters of fiscal year 2024. Consequently, DHS incorrectly reported data in the ACF-199 report for the 2nd and 4th quarters of fiscal year 2024. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Data within the ACF-199 report may not be complete and accurate. Specifically, if the work participation data is not substantiated, or inconsistencies are noted, it may result in inaccurate data being reported and may lead to an incorrect ACF-199 report and could result in an incorrect allocation of Federal Funds to the state. Cause – Controls are not operating effectively over the documentation of work participation data to ensure that adequate evidence of the work participation is maintained. Recommendation - We recommend that DHS enforce existing policies and procedures and implement additional controls to ensure that adequate documentation is maintained to substantiate the work participation data reported in the ACF-199 report in accordance with the District of Columbia Work Verification Plan. We also recommend that DHS implement policies, procedures and controls that will enable an accurate reconciliation between the data sources used in the preparation of the ACF-199 report to ensure proper reporting of data elements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings and will work with the DC Access System (DCAS) and Division of Innovation and Change Management (DICM) teams to mitigate the causes of the findings. These findings are mostly residual issues with the tables in DHS/ESA DCAS system. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-019 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Child Support Non-Cooperation Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 264.30 (a) (1) The State agency must refer all appropriate individuals in the family of a child, for whom paternity has not been established or for whom a child support order needs to be established, modified or enforced, to the child support enforcement agency (i.e., the IV-D agency). (2) Referred individuals must cooperate in establishing paternity and in establishing, modifying, or enforcing a support order with respect to the child. Per 45 CFR Section 264.30 (c) The IV-A agency must then take appropriate action by: (1) Deducting from the assistance that would otherwise be provided to the family of the individual an amount equal to not less than 25 percent of the amount of such assistance; or (2) Denying the family any assistance under the program. Per the Code of the District of Columbia - Section 4–205.55. (a) The Mayor shall give timely and adequate notice in cases of intended action to discontinue, withhold, terminate, suspend, reduce assistance, or make assistance subject to additional conditions, or to change the manner or form of payment to a protective, vendor, or 2-party payment. (1) “Timely” means that the notice is postmarked at least 15 days before the date upon which the action would become effective, except as provided in Section 4-205.54(d). (2) “Adequate” means that the written notice includes a statement of what action the Mayor intends to take, the reasons for the intended action, the specific law and regulations supporting the action, an explanation of the individual’s right to request a hearing, and the circumstances under which assistance will be continued if a hearing is requested. Condition – During our compliance test work for the Special Tests and Provisions – Child Support Non-Cooperation compliance requirement, we tested forty (40) out of a population of 295 child support cases referred by Child Support Enforcement (CSE) to the TANF program as having not cooperated with Child Support. We noted that for four (4) out of 40 samples, DHS was unable to provide support why the individual was not sanctioned. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support not imposing sanctions to individuals may result to noncompliance with TANF Child Support Non-Cooperation compliance requirements. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation supporting compliance with TANF Child Support Non-Cooperation compliance requirements. Recommendation - We recommend that DHS strengthen its existing policies and procedures over enforcement of sanctions and maintenance of appropriate documentation to ensure compliance with TANF Child Support Non-Cooperation compliance requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS/ESA agree with the auditor’s findings regarding the lack of completion of requests from the Child Support Enforcement (CSE) to the TANF program to impose a child support on parents who have not cooperated with child support compliance requirements. The incomplete work was due to staff transitions occurring during the review period which impacted the oversight and productivity of DHS/ESA staff working on the child support sanction process. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-020 Prior Year Finding Number: N/A Compliance Requirement: Special Tests and Provisions – Penalty for Refusal to Work Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.14 (a) and (b) “(a) If an individual refuses to engage in work required under section 407 of the Act, the State must reduce or terminate the amount of assistance payable to the family, subject to any good cause or other exceptions the State may establish. Such a reduction is governed by the provisions of Section 261.16. The State must, at a minimum, reduce the amount of assistance otherwise payable to the family pro rata with respect to any period during the month in which the individual refuses to work. The State may impose a greater reduction, including terminating assistance.” Condition – During our testing of Special Tests and Provisions – Penalty for Refusal to Work, we selected a sample of 60 cases in fiscal year 2024 to test DHS’ compliance with specified requirements. Total population is comprised of 4,812 case numbers for individuals that received payments for months where they did not meet the work requirements. Total dollar amount is $19,993,065. We noted the following: • For eight (8) instances, we noted that an individual had no participation hours in CATCH for various dates during fiscal year 2024 and DHS/ESA was unable to provide supporting exemptions or justifications for not sanctioning the individual during the period in question. • For one (1) instance, we noted that an individual had no participation hours reported in CATCH for period October 2023 through April 2024 but a review of DCAS showed that the individual was partially engaged during this period. The individual’s required hours increased to 30 but was coded to Outreach rather than Noncompliance, thus, there was miscoding of hours. Consequently, the individual was not sanctioned as required, and the benefits were not properly reduced. • For one (1) instance, we noted that an individual had no participation hours reported in CATCH for period April 2024 through September 2024 and a review of DCAS showed that the individual was paid twice for period March 2024 to September 2024, which resulted to potential overpayment of $3,528. DHS-ESA was unable to provide support to confirm whether the duplicate payment was necessary or was properly reversed. Total payments made to these ten (10) individuals during the periods in question was $59,874. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without properly maintaining documentation to support exemptions or justifications for not imposing sanctions to individuals, individuals may be given full benefits instead of reduced federal benefits under the TANF program. In addition, miscoding of hours or amounts paid may result to providing inappropriate benefits to individuals. Cause – DHS did not consistently adhere to its established policies and procedures requiring it to maintain documentation to support exemptions or justifications for individuals who refuse to fulfill the minimum working requirements to receive or maintain benefits under the TANF program. In addition, controls are not operating effectively over the supervisory review of transactions posted in DCAS to ensure accuracy. Recommendation - We recommend that DHS enforce existing policies and procedures over review and maintenance of appropriate documentation to ensure compliance with Penalty for Refusal to Work compliance requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings and will work within the Division of Customer Workforce Employment and Training (DCWET) team to mitigate the causes of the findings. These findings are mostly residual issues caused by inconsistency of caseload management practices. Another mitigating factor is attributable to inadequate training of staff involved in the sanction process. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-021 Prior Year Finding Number: 2023-024 Compliance Requirement: Special Tests and Provisions – Lack of Child Care for Single Custodial Parent of Child Under Age Six Program: U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) ALN: 93.558 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 45 CFR Section 261.15 “Can a family be penalized if a parent refuses to work because he or she cannot find child care? (a) No, the State may not reduce or terminate assistance based on an individual’s refusal to engage in required work if the individual is a single custodial parent caring for a child under age six who has a demonstrated inability to obtain needed child care, as specified at Section 261.56.” Per 45 CFR Section 261.16 “Does the imposition of a penalty affect an individual’s work requirement? A penalty imposed by a State against the family of an individual by reason of the failure of the individual to comply with a requirement under TANF shall not be construed to be a reduction in any wage paid to the individual.” Per 45 CFR Section 261.56 “What happens if a parent cannot obtain needed child care? (a)(1) If the individual is a single custodial parent caring for a child under age six, the State may not reduce or terminate assistance based on the parent's refusal to engage in required work if he or she demonstrates an inability to obtain needed child care for one or more of the following reasons: (i) Appropriate child care within a reasonable distance from the home or work site is unavailable; (ii) Informal child care by a relative or under other arrangements is unavailable or unsuitable; or (iii) Appropriate and affordable formal child care arrangements are unavailable. (2) Refusal to work when an acceptable form of child care is available is not protected from sanctioning. Per 45 CFR Section 261.57 What happens if a State sanctions a single parent of a child under six who cannot get needed child care? (a) If we determine that a State has not complied with the requirements of Section 261.56, we will reduce the SFAG payable to the State by no more than five percent for the immediately succeeding fiscal year unless the State demonstrates to our satisfaction that it had reasonable cause or it achieves compliance under a corrective compliance plan pursuant to Section 262.5 and 262.6 of this chapter. (b) We will impose the maximum penalty if: (1) The State does not have a statewide process in place to inform parents about the exception to the work requirement and enable them to demonstrate that they have been unable to obtain child care; or (2) There is a pattern of substantiated complaints from parents or organizations verifying that a State has reduced or terminated assistance in violation of this requirement. (c) We may impose a reduced penalty if the State demonstrates that the violations were isolated or that they affected a minimal number of families. Condition – During our test work over a sample of twenty-nine (29) out of a population of 275 childcare cases reviewed by supervisors and included on two quarterly reports submitted to the DC Office of the State Superintendent of Education (OSSE), for Special Tests and Provisions - Lack of Child Care of Single Custodial Parent of Child under Age Six, we noted that all files sampled were reviewed by the supervisors. However, for one child care case, we noted the following: (1) the Date the discussion was held with the Eligibility worker, the date the Eligibility worker made corrections, and Eligibility Review completed date were not included; and (2) no comments were included by the supervisor to explain the “No” responses on various questions, or the status of the “No” responses. Consequently, we were unable to verify that the required follow-up occurred for this one sample. Questioned Costs – Not determinable. Context – This is a condition identified per review of DHS’ compliance with specified requirements using a statistically valid sample. Effect – Without following the internal controls and policies and procedures already in place to ensure that eligibility for child care is being properly determined by staff, it may result in inaccurate decisions for child care cases or inaccurate information being reported to OSSE. Cause – Controls are not operating effectively over the documentation of the supervisory review of child care cases before submission of the quarterly report to OSSE. Recommendation - We recommend that DHS/ESA enforce existing policies and procedures and implement additional controls to ensure that all Supervisory Case Record Review forms are properly completed and reviewed, signed and dated by the supervisor before the report is submitted to OSSE. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DHS agrees with the findings that appropriate actions were taken to approve the case, however, the reviewing supervisor failed to update the Supervisory Case Review form with 1) date the discussion was held with the eligibility worker, the date the eligibility worker made corrections, and the date the eligibility worker review was completed and 2) failed to enter comments on “No” responses on various questions. DHS will enforce current policies and procedures and will ensure that Supervisory Case Reviews are updated and double-checked by the supervisor once the eligibility worker make the corrections prior to OSSE’s report being submitted to reflect the accurate information. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-022 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Child Care and Development Fund Cluster ALN: 93.575, 93.596 Award #: 2401DCCDD; 2101DCCDC6 Award Years: 10/01/2023 – 09/30/2026 10/01/2020 – 09/30/2024 Government Department/Agency: Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – For one (1) subaward sample selected for FFATA testing, we noted that OSSE failed to provide evidence that it reported the subaward information through the FSRS or sam.gov website to fulfill the FFATA requirements. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report results in noncompliance for the Child Care and Development Block Grant program. Cause – OSSE did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that OSSE evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE concurs with the auditor’s finding and recommendations related to this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-022 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Child Care and Development Fund Cluster ALN: 93.575, 93.596 Award #: 2401DCCDD; 2101DCCDC6 Award Years: 10/01/2023 – 09/30/2026 10/01/2020 – 09/30/2024 Government Department/Agency: Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – For one (1) subaward sample selected for FFATA testing, we noted that OSSE failed to provide evidence that it reported the subaward information through the FSRS or sam.gov website to fulfill the FFATA requirements. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report results in noncompliance for the Child Care and Development Block Grant program. Cause – OSSE did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that OSSE evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE concurs with the auditor’s finding and recommendations related to this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-023 Prior Year Finding Number: 2023-027 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Based on CFSA’s Human Resources Administration Issuance: HR-06-1 dated May 12, 2006, staff must seek and receive advance written approval prior to working overtime. It also indicates that in emergency situations requiring an immediate response, the employee shall make every reasonable attempt to obtain advance approval by an appropriate manager or supervisor. Per District Personnel Issuance No. 2018-00 (Annual Leave) effective April 21, 2018 “Using Annual Leave” - An employee may use accrued annual leave at any time during the leave year if they receive approval from their immediate supervisor or the agency head responsible for the employee’s timesheet. If an employee wishes to use their accrued annual leave, they must: 1. Submit a request in advance to use annual leave to their manager or supervisor. 2. Receive approval from the manager or supervisor; and 3. Record the approved leave taken on their timesheet in PeopleSoft. CFSA uses a Random Moment Study (RMS) to allocate the administrative costs to the Foster Care program. The study entails selecting a sample of social workers on a quarterly basis to participate in the RMS study where the social workers are required to notate what they were doing at the sample moment. Subsequently, the supervisors of these social workers review and validate their responses. validation of the responses adds an extra layer of reliability to the data collected. It ensures that the information provided by social workers is accurate and reflective of their actual activities. This validation process helps maintain the integrity of the study and ensures that the results are trustworthy in making decisions when determining the RMS percentage utilization in the allocation of the administrative costs. Condition – The following issues were observed: 1. Our procedures revealed that CFSA had erroneously included fiscal year 2025 expenditures totaling $2,571,560 in the fiscal year 2024 cost allocation, thereby overstating expenses reported and claimed. The financial impact based on the allocation calculation to the Foster Care program was $724,724. 2. During our review of the payroll process regarding the review and approval of time and attendance, we noted the following in our sample of 60 payroll items: • For two (2) samples, CFSA failed to provide documentation evidencing the approval of overtime paid and annual leave taken. • For three (3) samples, we noted that there were differences between the approved hours of overtime and annual leave paid and the actual hours taken. CFSA failed to provide documentation for the actual hours taken. • For one (1) sample, validation of the Random Moment Study was not performed. Questioned Costs – Known amount is $724,724. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample and review of the detail expenses database compared to the SEFA. Effect – CFSA reported and claimed fiscal year 2025 costs, which resulted into questioned costs. Additionally, without adequate internal controls and procedures for record maintenance, there is a risk of disputes between the agency and its employee’s accuracy of leave and overtime. Furthermore, failing to validate the Random Moment Study (RMS) may result in inaccurate outcomes, compromising the study's effectiveness in allocating administrative costs. Cause – CFSA did not have proper internal controls and policies and procedures in place to ensure that the correct fiscal year costs were submitted and claimed, and that authorization forms evidencing the preapproval of overtime and annual leave were maintained. Additionally, CFSA did not follow its internal controls, policies, and procedures to ensure the accuracy and consistent documentation of the RMS validation. Recommendation - We recommend that CFSA strengthen its policies, procedures, and controls to ensure that costs are accurately reported and claimed. We also recommend that pre-authorization of overtime and annual leave is maintained. Furthermore, we recommend that CFSA enhance its procedures to ensure the verification process is performed and maintained and the supervisors maintain consistent documentation of the RMS validation. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings as stated. Regarding Condition 2 above, Differences in pre-approved leave or overtime and actual leave or overtime taken are not uncommon in light of changing circumstances. CFSA notes that for one sample involving overtime charges, the situation involved a social worker performing field work and the difference between pre-approved overtime and actual overtime taken was 30 minutes. Regarding the RMS, CFSA notes that the statistical standard for supervisory validation of RMS responses is 10%. Across fiscal year 2024 as a whole, CFSA’s validation rate of accepted responses was 10% and therefore met this standard. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-024 Prior Year Finding Number: 2023-028 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. 29 CFR Section 97.20(b)(2), Accounting records. “Grantees and sub grantees must maintain records which adequately identify the source and application of funds provided for financially assisted activities. These records must contain information pertaining to grant or subgrant awards and authorizations, obligations, unobligated balances, assets, liabilities, outlays or expenditures, and income.” Per 45 CFR Section 1356.30(b), “The Title IV-E agency may not approve or license any prospective foster or adoptive parent, nor may the Title IV-E agency claim Federal Financial Participation (FFP) for any foster care maintenance or adoption assistance payment made on behalf of a child placed in a foster home operated under the auspices of a child placing agency or on behalf of a child placed in an adoptive home through a private adoption agency, if the Title IV-E agency finds that, based on a criminal records check conducted in accordance with paragraph (a) of this section, a court of competent jurisdiction has determined that the prospective foster or adoptive parent has been convicted of a felony involving: (1) Child abuse or neglect; (2) Spousal abuse; (3) A crime against a child or children (including child pornography); or, (4) A crime involving violence, including rape, sexual assault, or homicide, but not including other physical assault or battery.” Per 45 CFR Section 1356.30(f), "In order for a childcare institution to be eligible for Title IV-E funding, the licensing file for the institution must contain documentation which verifies that safety considerations with respect to the staff of the institution have been addressed.” Furthermore, per 45 CFR Section 1356.21(a), “Statutory and regulatory requirements of the Federal foster care program, To implement the foster care maintenance payments program provisions of the Title IV-E plan and to be eligible to receive FFP for foster care maintenance payments under this part, a Title IV-E agency must meet the requirements of this section, 45 CFR 1356.22, 45 CFR 1356.30, and Parts 472, 475(1), 475(4), 475(5), 475(6).” Per CFSA policy 6008.1, “As part of the home study process, an agency shall ensure that each applicant and any other person eighteen (18) years of age or older residing in the home comply with the requirements for a criminal records check established by the Adoption and Safe Families Amendment Act of 2000, effective June 27, 2000, D.C. Law 13-136.” Condition – For the fiscal year 2024, the Foster Care program had total disbursements of $2,390,443 for 3,008 maintenance payments. We selected a sample of 60 participants representing disbursed federal funds totaling $43,656, we noted the following deficiencies: • For one (1) of 60 samples, CFSA was unable to provide valid providers licenses as required by CFR 1356.30 (b) and background check information. • For one (1) of 60 samples, CFSA did not provide copy of the registry check which is part of the criminal records check required by CFR 1356.30 (b) and CFSA policy 6008.1. • For one (1) of 60 samples, CFSA did not provide complete documentation for adult member that resided in the home; therefore, we were unable to determine whether background checks such as criminal record checks and fingerprint-based checks from the national crime information databases was properly performed as required by the District of Columbia as detailed in CFSA policy 6008.1. These deficiencies represent 4% of the total disbursements tested. Questioned Costs – Known amount is $1,583. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – CFSA was not in compliance with the eligibility requirements of the Foster Care program. Cause – CFSA does not have adequate controls in place to ensure that the required eligibility documentation is maintained to evidence compliance with eligibility requirements. Recommendation - We recommend CFSA reevaluate and strengthen its existing policies and procedures over the review and maintenance of appropriate documentation to ensure compliance with eligibility requirements in accordance with the program. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings. The licensure issue involved a provider who was in process of permanently closing her home as a foster care provider (and the existing license expired in the meantime), and the other item involved a brief lapse in the child protection register check. Corrective action will involve improved automation within the claiming process. CFSA also acknowledges that the third bullet regarding the legibility of the background criminal check document for the “other adult in the home” is an internal control issue for which there are no questioned costs. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-025 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per OMB No. 0970-0205, Form CB-496, Title IV-E Programs Quarterly Financial Report, “is required to be submitted at the end of each fiscal quarter by each State or Tribe with an approved plan under the Title IV-E of the Social Security act to administer the Foster Care, Adoption Assistance, and Guardianship Assistance programs. In submitting this form, each State or Tribal grantee meets its statutory and regulatory requirements to report actual program expenditures made in the preceding fiscal quarter and to provide an estimate of program expenditures anticipate in the upcoming fiscal quarter. Condition – The following conditions were observed: 1. Based on reconciliation review of Form CB-496 for all the quarterly reports in fiscal year 2024, it was observed that CFSA incorrectly calculated the family-based rate adjustment claims for quarters 2, 3 & 4. CFSA failed to apply the Federal Medical Assistance Percentage (FMAP) rate of 76.2% to net adjusted IV-E maintenance costs. Instead, the gross amount was reported and claimed, resulting in an overstatement of $412,808 for claims reported - $140,209 related to quarter 2, $135,819 related to quarter 3, and $136,780 related to quarter 4. 2. During the reconciliation of the SEFA to the claimed program expenditures, as reported on Form CB-496, we noted that expenditures totaling $791,224 were charged to the incorrect grant years for the Title IV-E Foster Care grant. Although these costs were not claimed by the agency, as a result of the error relating to the incorrect grant years, the SEFA did not reconcile to the submitted CB-496 reports. Questioned Costs – Known amount is $412,808. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported, CFSA can report incorrect amounts on the quarterly federal claims submissions. Cause – CFSA did not have proper internal controls and policies and procedures in place to ensure that the amounts on the quarterly claims submissions were properly reported. Recommendation - We recommend that CFSA implement policies, procedures and controls that will enable an accurate preparation of quarterly reporting. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with the findings. The finding involved a recurring formula error in the workbook CFSA uses to calculate its lapsing quarter family-based rate adjustment. The issue stemmed from the pandemic-era stimulus funding that increased the District’s FMAP percentage from the standard 70% to 76.2%, which CFSA accommodated in its family-based rate adjustment claiming tools with manual entries. Corrective action is outlined in the Management’s Section, but in the meantime the District has returned to the standard 70% FMAP, which precludes recurrence. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-026 Prior Year Finding Number: 2023-029 Compliance Requirement: Special Tests and Provisions – Payment Rate Setting and Application Program: U.S. Department of Health and Human Services Foster Care – Title IV-E ALN: 93.658 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Child and Family Services Agency (CFSA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per CFSA’s internal policies and procedures, providers must submit quarterly reports within 45 days of the end of each Federal fiscal year quarter. Upon receipt of quarterly reports from the provider, the Business Services Administration Program Manager reviews each Expenditure Detail Spreadsheet for compliance, accuracy and reasonableness. Condition – Our assessment of the special tests and provisions requirement, revealed that while the selected providers’ quarterly reports displayed no deficiencies, CFSA was unable to provide documentation evidencing the review and approval of the quarterly reports relating to all 40 transactions that were tested. Questioned Costs – Not determinable. Context – This is a condition identified per review of CFSA’s compliance with specified requirements using a statistically valid sample. Effect – The absence of documentation specifying who reviews and approves the quarterly reports compromises accountability and creates ambiguity in identifying the responsible parties in instances of errors or discrepancies. Cause – CFSA does not have adequate controls in place to ensure that review and approval of provider’s quarterly reports are documented. Recommendation - We recommend CFSA strengthen its policies and procedures to address the review and approval process for the provider’s quarterly reports. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – CFSA concurs with this finding as stated. The analysis of provider quarterly reports was performed consistently, but CFSA was inconsistent in demonstrating through formal correspondence back to the provider community that their quarterly reports were acceptable and approved as submitted. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-027 Prior Year Finding Number: 2023-032 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” In accordance with 42 CRF Section 435.912(c)(3), Timeliness and performance standard requirements - Standard for new applications and transferred accounts. Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed — (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. 42 CRF Section 435.912 (c)(4) Standard for renewals. The redetermination of eligibility at a beneficiary's regularly scheduled renewal may not exceed the end of the beneficiary's eligibility period, except as provided in paragraphs (e) and (c)(4)(i) and (ii) of this section. (i) In the case of a beneficiary who returns a renewal form less than 30 calendar days prior to the end of the beneficiary's eligibility period, the redetermination of eligibility may not exceed the end of the month following the end of the beneficiary's eligibility period. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed— (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. 42 CRF Section 435.912 (c)(5) Standard for redeterminations based on changes in circumstances. Except as provided in paragraph (e) of this section, the redetermination of eligibility for a beneficiary based on a change in circumstances reported by the beneficiary or received from a third party may not exceed the end of the month that occurs — (i) 30 calendar days following the agency's receipt of information related to the change in circumstances, unless the agency needs to request additional information from the beneficiary; (ii) 60 calendar days following the agency's receipt of information related to the change in circumstances if the agency must request additional information from the beneficiary; or (iii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis — (A) 90 calendar days following the determination of ineligibility on the current basis, for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days following the determination of ineligibility on the current basis for all other beneficiaries. 42 CRF Section 435.912 (c)(6) Standard for redeterminations based on anticipated changes. The redetermination of eligibility for a beneficiary based on an anticipated change in circumstances may not exceed the end of the month in which the anticipated change occurs, except as provided in paragraphs (e) and (c)(6)(i) and (ii) of this section. (i) In the case of a beneficiary who returns information or documentation requested pursuant to Section 435.919(b)(6) less than 30 calendar days prior to the end of the month in which the anticipated change occurs, the redetermination of eligibility may not exceed the end of the month following the month in which the anticipated change occurs. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed — (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination totaling 283,898 total population during the fiscal year 2024 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exception: • For three (3) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-027 Prior Year Finding Number: 2023-032 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” In accordance with 42 CRF Section 435.912(c)(3), Timeliness and performance standard requirements - Standard for new applications and transferred accounts. Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed — (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. 42 CRF Section 435.912 (c)(4) Standard for renewals. The redetermination of eligibility at a beneficiary's regularly scheduled renewal may not exceed the end of the beneficiary's eligibility period, except as provided in paragraphs (e) and (c)(4)(i) and (ii) of this section. (i) In the case of a beneficiary who returns a renewal form less than 30 calendar days prior to the end of the beneficiary's eligibility period, the redetermination of eligibility may not exceed the end of the month following the end of the beneficiary's eligibility period. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed— (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. 42 CRF Section 435.912 (c)(5) Standard for redeterminations based on changes in circumstances. Except as provided in paragraph (e) of this section, the redetermination of eligibility for a beneficiary based on a change in circumstances reported by the beneficiary or received from a third party may not exceed the end of the month that occurs — (i) 30 calendar days following the agency's receipt of information related to the change in circumstances, unless the agency needs to request additional information from the beneficiary; (ii) 60 calendar days following the agency's receipt of information related to the change in circumstances if the agency must request additional information from the beneficiary; or (iii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis — (A) 90 calendar days following the determination of ineligibility on the current basis, for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days following the determination of ineligibility on the current basis for all other beneficiaries. 42 CRF Section 435.912 (c)(6) Standard for redeterminations based on anticipated changes. The redetermination of eligibility for a beneficiary based on an anticipated change in circumstances may not exceed the end of the month in which the anticipated change occurs, except as provided in paragraphs (e) and (c)(6)(i) and (ii) of this section. (i) In the case of a beneficiary who returns information or documentation requested pursuant to Section 435.919(b)(6) less than 30 calendar days prior to the end of the month in which the anticipated change occurs, the redetermination of eligibility may not exceed the end of the month following the month in which the anticipated change occurs. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed — (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination totaling 283,898 total population during the fiscal year 2024 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exception: • For three (3) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-027 Prior Year Finding Number: 2023-032 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” In accordance with 42 CRF Section 435.912(c)(3), Timeliness and performance standard requirements - Standard for new applications and transferred accounts. Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed — (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. 42 CRF Section 435.912 (c)(4) Standard for renewals. The redetermination of eligibility at a beneficiary's regularly scheduled renewal may not exceed the end of the beneficiary's eligibility period, except as provided in paragraphs (e) and (c)(4)(i) and (ii) of this section. (i) In the case of a beneficiary who returns a renewal form less than 30 calendar days prior to the end of the beneficiary's eligibility period, the redetermination of eligibility may not exceed the end of the month following the end of the beneficiary's eligibility period. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed— (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. 42 CRF Section 435.912 (c)(5) Standard for redeterminations based on changes in circumstances. Except as provided in paragraph (e) of this section, the redetermination of eligibility for a beneficiary based on a change in circumstances reported by the beneficiary or received from a third party may not exceed the end of the month that occurs — (i) 30 calendar days following the agency's receipt of information related to the change in circumstances, unless the agency needs to request additional information from the beneficiary; (ii) 60 calendar days following the agency's receipt of information related to the change in circumstances if the agency must request additional information from the beneficiary; or (iii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis — (A) 90 calendar days following the determination of ineligibility on the current basis, for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days following the determination of ineligibility on the current basis for all other beneficiaries. 42 CRF Section 435.912 (c)(6) Standard for redeterminations based on anticipated changes. The redetermination of eligibility for a beneficiary based on an anticipated change in circumstances may not exceed the end of the month in which the anticipated change occurs, except as provided in paragraphs (e) and (c)(6)(i) and (ii) of this section. (i) In the case of a beneficiary who returns information or documentation requested pursuant to Section 435.919(b)(6) less than 30 calendar days prior to the end of the month in which the anticipated change occurs, the redetermination of eligibility may not exceed the end of the month following the month in which the anticipated change occurs. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed — (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination totaling 283,898 total population during the fiscal year 2024 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exception: • For three (3) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-028 Prior Year Finding Number: 2023-033 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.” Condition – During our testwork over nonpayroll transactions for the Activities Allowed or Unallowed and Allowable Costs/Cost Principles, we noted that for one (1) out of sixty-two (62) samples, the transaction was charged twice to the program. Total amount of nonpayroll transactions is $19,095,189, and the amount of exception is $122,311. Questioned Costs – Known amount is $122,311. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Total amount of samples selected for testing amounted to $5,633,513. Effect – Lack of proper review of expenditures could result to unallowable costs charged to the program. Cause – DBH does not have adequate controls in place to ensure that only allowable costs are charged to the program. Recommendation – We recommend that DBH strengthen internal control procedures to ensure that expenditures are allowable, and that sufficient documentation is retained to support that allowability. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-029 Prior Year Finding Number: N/A Compliance Requirement: Cash Management Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. When entities are funded on a reimbursement basis, program costs must be incurred prior to the date of the reimbursement request (2 CFR Section 200.305(b)(3)). US Department of the Treasury (Treasury) regulations at 31 CFR Part 205 implement the Cash Management Improvement Act of 1990 (CMIA), as amended (Pub. L. No. 101-453; 31 USC 6501 et seq.). Subpart A of those regulations requires state recipients to enter into Treasury-State Agreements that prescribe specific methods of drawing down federal funds (funding techniques) for federal programs listed in the Assistance Listing (Catalog of federal Domestic Assistance) that meet the funding threshold for a major federal assistance program under the CMIA. Treasury-State Agreements also specify the terms and conditions under which an interest liability would be incurred. Programs not covered by a Treasury-State Agreement are subject to procedures prescribed by Treasury in Subpart B of 31 CFR Part 205 (Subpart B), which at 31 CFR section 205.33(a) include the requirement for a state to minimize the time between the drawdown of federal funds and their disbursement for federal program purposes. Condition – During our testing of individual draws of federal funds, we noted that for one (1) sample selected and tested, the review of drawdown was made after it has been requested. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. The sample drawdown, which is related to expenditures incurred during fiscal year 2024, was requested on December 24, 2024 but the review of the drawdown request did not happen until January 28, 2025. The total drawdown selected for testing amounted to $19,381,854. Effect – DBH is not in compliance with cash management requirements. Failure to timely review cash draw requests could result in cash draws that do not accurately reflect eligible program costs. Cause – DBH did not appear to adhere to internal control procedures to ensure the timely review of cash draws. Recommendation – We recommend DBH evaluate its existing cash management control procedures and ensure all federal draw requests are reviewed timely. We also recommend DBH establish procedures to periodically monitor its compliance with the cash management requirements and initiate necessary actions to resolve any noncompliance that results. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with the finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-030 Prior Year Finding Number: 2023-035 Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Federal Financial Report (FFR) Controls over Reporting Compliance: 2 CFR 200.333 requires that financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or pass-through entity in the case of a subrecipient. Performance Progress Report (PPR) Underlying Data: The audit objective for the Reporting compliance requirement stated in the 2 CFR Part 200, appendix XI Compliance Supplement is as follows: Determine whether required reports for Federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Schedule of Expenditures of Federal Awards (SEFA) Reporting Compliance: Requirements, Cost Principles, and Audit Requirements, section 200.510(b) states the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 200.502. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Condition – During our testing of the reporting compliance requirement, we noted the following: • FFR Controls over Reporting Compliance: DBH’s control over compliance for financial reporting is as follows: “All reports are reviewed by the Accounting Officer or Agency Fiscal Officer prior to submission to the Federal government. DBH Program and Fiscal Services staff review programmatic and financial reports.” We noted DBH did not timely review and approve the annual Financial Reporting Report (FFR or SF-425) prior to submission to the Federal government. Total population is one (1) report and sample selected is one (1). • PPR Reporting Compliance: We noted DBH did not have documentation for the information, as well as the source of the information, it used in the Opioid STR’s Performance Progress Report. Information as reported in the reports was unsupported as management did not retain the underlying data. Total population is two (2) reports and sample selected is one (1). • SEFA Reporting Compliance: During our testing for the SEFA, we noted that DBH incorrectly reported the value of subrecipient expenditures included within the subrecipient expenditure column. For the year ended September 30, 2024, DBH incurred $12.0 million in subrecipient expenditures for this program and incorrectly reported that there were no subrecipient expenditures on the initial SEFA. While the subrecipient expenditures amount was not accurate, the total expenditures amount was accurately reported. The error in the subrecipient expenditures amount was subsequently identified and corrected as a result of the audit process. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with specified reporting requirements using a statistically valid sample. Effect – Without proper internal controls and policies and procedures in place to ensure that correct amounts were reported and were properly reviewed as it relates to the Opioid STR program: • FFR Controls over Reporting Compliance: There is an increased risk of errors occurring and being undetected, or errors being present in reports if no review and approval occurred. • PPR Reporting Compliance: DBH cannot be assured that it reported complete and accurate information to enable the Substance Abuse and Mental Health Services Administration (SAMHSA), an operating division of the Department of Health and Human Services (HHS), to assess the outcomes of the State’s use of Opioid program funding. • SEFA Reporting Compliance: The effect of the condition is that the SEFA was not accurately prepared. Cause – Management did not have proper internal controls and policies and procedures in place to ensure that the amounts on the FFR and SEFA were properly reported, and the reports were properly reviewed and approved. Recommendation – We recommend the following: • FFR Controls over Reporting Compliance: We recommend DBH strengthen its internal control to ensure timely review and approval of the FFR before report submission. • PPR Reporting Compliance: We recommend DBH develop formal, written procedures to identify the sources of information necessary and steps needed to compile accurate and complete information for the Opioid program performance reports; and retain in a central location all documentation that it used to support information included in each performance report it submits to the federal government. • SEFA Reporting Compliance: We recommend DBH ensure that agency personnel receive proper training on subrecipient versus vendor determination; as well as review existing policies and procedures for preparing the Schedule of Expenditures of Federal Awards to ensure that it is complete and accurate. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-031 Prior Year Finding Number: 2023-036 Compliance Requirement: Subrecipient Monitoring Program: U.S. Department of Health and Human Services Opioid STR ALN: 93.788 Award #: Various Award Year: 09/30/2020 – 09/29/2024 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Earmarking Requirements for Subrecipients: Award recipients must comply with the requirements for subrecipients monitoring and management as outlined in the provisions of 45 CFR Section 75.351-352 and should ensure written subaward/subcontract agreements are in place. The written agreement must require that subrecipients comply with the same terms and conditions as the prime recipient, as applicable (i.e., financial management requirements, audit requirements, etc.) and should describe the scope of work, deliverables, etc. The grant agreements provide that the District may use no more than ten (10) percent of the total grant award for administrative costs and developing the infrastructure necessary for expansion of services. Also, no more than ten (10) percent of the total grant award may be used for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Condition – During our testing of the Subrecipient Monitoring compliance requirement, we noted the following: Earmarking Requirements for Subrecipients: During our testing of the State Targeted Response to the Opioid Crisis Program, we noted that the agency used a different established indirect cost rate in monitoring the earmarking of awardees than the maximum administrative costs/indirect costs. For two (2) out of eleven (11) samples selected for testing, the awardees exceeded the ten (10) percent funding limitation for administrative costs/indirect costs. In addition, DBH does not have a process to monitor the ten (10) percent earmarking requirement for costs of developing the infrastructure necessary for expansion of services; and for data collection, performance measurement, and performance assessment, including incentives for participating in the required data collection follow-up. Total amount of population is $11,977,624, and the total amount of exceptions for two (2) samples is $524,658. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with specified subrecipient monitoring requirements using a statistically valid sample. Effect – Subrecipients may not be properly monitored, which may result in subawards being used for unauthorized purposes in violation of the terms and conditions of the subawards or that the subaward performance goals were not achieved. Cause – There is lack of sufficient documentary evidence to support that the controls are operating as designed related to subrecipient monitoring compliance. Recommendation – We recommend that DBH maintain sufficient documentation to evidence its internal controls over the risk assessment and monitoring of subrecipients. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-032 Prior Year Finding Number: N/A Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services HIV Care Formula Grants ALN: 93.917 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. To be eligible to receive assistance in the form of therapeutics, an individual must meet the following requirement: 42 U.S. Code Section 300ff-26 - Provision of treatments: (b) Eligible individual. To be eligible to receive assistance from a State under this section an individual shall— (1) have a medical diagnosis of HIV/AIDS; and (2) be a low-income individual, as defined by the State. Condition – During our review of forty (40) participant eligibility files out of population of 875, under the HIV Care Formula Grants, we noted the following: • For all forty (40) participant eligibility files tested, we noted absence of secondary supervisory review as required. Specifically, eligibility determinations are made solely by the eligibility specialist without documented supervisory review or sign-off. • For two (2) participant files reviewed, we noted that there was no documentation pertaining to the proof of HIV diagnosis, verification of income and/or residency in the Ramsell Eligibility System. Questioned Costs – Not determinable. Context – This is a condition identified per review of DC Health’s compliance with specified requirements for eligibility using a statistically valid sample. Effect – The lack of a secondary review or maintenance of eligibility documents increases the risk of noncompliance with federal eligibility requirements, potentially leading to questioned costs. Cause – DC Health does not have a formal supervisory review process in place to verify the completeness and accuracy of eligibility determinations. Recommendation – We recommend that DC Health strengthen its existing policies and procedures by establishing a formal supervisory review process that includes a documented secondary review and approval of all eligibility files prior to participant enrollment. Additionally, we recommend that DC Health enhance its internal control procedures to ensure that all documentation supporting eligibility determinations is properly maintained in accordance with program requirements. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. The HIV/AIDS, Hepatitis, STD and TB Administration (HAHSTA) has done a preliminary assessment of the root cause and conditions that created the exceptions noted in the testing of eligibility samples. DC Health agrees that the infrequency of reviews and lack of documented secondary supervisory reviews are contributing factors. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-033 Prior Year Finding Number: N/A Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Health and Human Services HIV Care Formula Grants ALN: 93.917 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health (DC Health) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Matching States and territories (excluding Puerto Rico) with greater than one percent of the aggregate number of national cases of HIV/AIDS in the two-year period preceding the federal fiscal year in which the state is applying for a grant must, depending on the number of years in which this threshold requirement has been met, provide matching funds as follows (42 USC 300ff-27(d)): All recipients are subject to a matching requirement for ADAP supplemental funds in an amount equal to $1 for every $4 of federal funds (42 USC 300ff-28(a)(2)(F)(ii)(III)). Those recipients that are required to match the base formula funds may request and receive a waiver from this additional matching requirement. Level of Effort The state/territory will maintain HIV-related activities at a level that is equal to not less than the level of such expenditures by the state/territory for the one-year period preceding the fiscal year for which the state/territory is applying for RWHAP Part B funds (42 USC 300ff- 27(b)(7)(E)). Maintenance of Effort (MOE) requirement: The recipient must maintain non-federal funding for HIV-related activities at a level that is not less than the expenditures for such activities during the fiscal year prior to receiving the award (see Section 2617(b)(7)(E) of the PHS Act). Condition – DC Health did not provide the necessary documentation to support the computation of the required matching and level of effort amounts. As a result, we were unable to verify whether DC Health met the required thresholds or performed the appropriate calculations. Questioned Costs – Not determinable. Context – This is a condition identified per review of DC Health’s compliance with specified requirements. Effect – Without adequate internal controls to ensure proper documentation of the requirements, it may increase the risk that matching costs will be questioned. Cause – DC Health does not have adequate internal controls requiring the retention of documentation related to matching and level of effort compliance. Recommendation – We recommend that DC Health strengthen its policies and procedures to ensure that all matching contributions and level of effort requirements thresholds are properly documented. DC Health should ensure that detailed reconciliations, expenditure reports, and applicable source documents are maintained for audit purposes. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DC Health concurs with the finding. While DC Health reported match and level of effort expenditures in total, there was not sufficient documentation to distinguish 100% of the components of the match and LOE required. This detail included account-types/classifications, account numbers, allocation amounts and service areas needed to total the match and LOE requirements. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-034 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430 (g): Standards for Documentation of Personnel Expenses. (1) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient; (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition – We noted that the DBH allocated payroll expenditures to the Block Grants for Substance Use Prevention, Treatment and Recovery Services (SUPTRS) during fiscal year 2024 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management’s estimate of the respective employee’s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management cannot provide supporting documentation regarding the periodic comparison of actual costs to the budgeted costs as required by 2 CFR Section 200.430. Specifically, 17 out of 60 sampled payroll items tested for the SUPTRS program were recorded based on estimated hours and not actual hours. For the other 43 sampled items, these individuals worked 100% of their time on SUPTRS, therefore, there is no possibility of error. Questioned Costs – Known amount is $43,235. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Payroll costs, including fringe benefits, for the SUPTRS program in fiscal year 2024 totaled $4,667,478. Effect – DBH was unable to demonstrate that the payroll expenditures charged to the SUPTRS program accurately reflected the actual time incurred on the program and such expenditures were properly supported in accordance with 2 CFR Section 200.430, Compensation – Personal Services. Cause – DBH does not have policies and procedures in place to review and reconcile the estimated amount of payroll expenditures charged to the SUPTRS Program to the actual expenditures incurred. Recommendation – We recommend that DBH deploy policies and procedures to periodically compare employees’ estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR Section 200.430. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls in place to resolve the issue. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-035 Prior Year Finding Number: N/A Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Earmarking requirement: a) The state shall expend not less than 20 percent of Substance Use Prevention, Treatment and Recovery Services Block Grant (SUPTRS BG) for primary prevention programs for individuals who do not require treatment for Substance Use Disorder (SUD). The programs should educate and counsel the individuals on such SUD and provide for activities to reduce the risk of such SUD by the individuals (42 USC 300x-22; 45 CFR Sections 96.124 (b)(1) and 96.125). b) Designated states (i.e., any state whose cases of Acquired Immunodeficiency Syndrome (AIDS) is 10 or more per 100,000 individuals (as indicated by the number of such cases reported to and confirmed by the Centers for Disease Control and Prevention for the most recent calendar year for which data are available)), shall expend not less than two percent and not more than five percent of the award amount to carry out one or more projects to make available to individuals early intervention services for HIV disease (EIS HIV) at the sites where the individuals are undergoing SUD treatment. c) The state may not expend more than five percent of the grant to pay the costs of administering the grant (42 USC 300x-31; 45 CFR Section 96.135 (b)(1)). Condition – DBH did not provide the necessary documentation to support compliance with earmarking requirements as described above. As a result, we were unable to verify whether DBH met the required thresholds. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with earmarking requirements. Effect – Without adequate internal controls to ensure proper documentation of the requirements, it may increase the risk that earmarking requirements may not be met. Cause – DBH does not have adequate internal controls requiring the retention of documentation related to earmarking compliance requirements. Recommendation – We recommend that DBH strengthen its policies and procedures to ensure that all earmarking requirements thresholds are properly documented. DBH should ensure that detailed reconciliations, expenditure reports, and applicable source documents are maintained for audit purposes. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-036 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition – Subrecipient expenditures, totaling approximately $1.1 million, which are required to be presented in the Schedule of Expenditures of Federal Awards (SEFA), were improperly excluded from the initial SEFA prepared by management. Subsequently, the SEFA was adjusted by DBH to reflect the subrecipient expenditures incurred for the program. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with reporting requirements. Effect – Failure to properly review and present expenditures can result in noncompliance with reporting requirements. Cause – DBH did not comply with their policies and procedures to ensure accuracy of the SEFA. Recommendation – We recommend that DBH adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Homeland Security Homeland Security Grant Program ALN: 97.067 Award #: EMW-2021-SS-00078-S01, EMW-2022-SS-00084-S01, EMW-2023-SS-00056-S01 Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Homeland Security and Emergency Management Agency (HSEMA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – For all nine (9) first tier subawards samples selected for FFATA testing, we noted that HSEMA failed to provide evidence that it reported the subaward information through the FSRS or sam.gov website to fulfill the FFATA requirements. Questioned Costs – None. Context – This is a condition identified per review of HSEMA’s compliance with reporting requirements using a statistically valid sample. Effect – Failure to properly submit the FFATA report results in noncompliance for the Homeland Security Grant program. Cause – HSEMA did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that HSEMA evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – HSEMA concurs that the subaward reporting required by FFATA is not currently complete and up to date in sam.gov website. Due to the transition to sam.gov and the FSRS system being terminated, the record of prior FFATA reports submitted that encountered errors and were left in partially complete status is no longer retrievable from the FSRS system to demonstrate that the report had been submitted. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-022 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Child Care and Development Fund Cluster ALN: 93.575, 93.596 Award #: 2401DCCDD; 2101DCCDC6 Award Years: 10/01/2023 – 09/30/2026 10/01/2020 – 09/30/2024 Government Department/Agency: Office of the State Superintendent of Education (OSSE) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Part 170, Appendix A, under the Federal Funding Accountability and Transparency Act (FFATA), the department is required to collect and report information on each subaward or amendment of $30,000 or more in federal funds in the FFATA Subaward Reporting System (FSRS) or System for Award Management (sam.gov) website from March 8, 2025 onwards. In accordance with the requirements of 2 CFR Section 1402.300(b), the non-Federal entity is responsible for complying with all requirements of the Federal award. For all Federal awards, this includes the provisions of FFATA, which includes requirements on executive compensation, and also requirements implementing the Act for the non-Federal entity at 2 CFR Part 25 Financial Assistance Use of Universal Identifier and System for Award Management and 2 CFR Part 170 Reporting Subaward and Executive Compensation Information. Condition – For one (1) subaward sample selected for FFATA testing, we noted that OSSE failed to provide evidence that it reported the subaward information through the FSRS or sam.gov website to fulfill the FFATA requirements. Questioned Costs – None. Context – This is a condition identified per review of OSSE’s compliance with reporting requirements. Effect – Failure to properly submit the FFATA report results in noncompliance for the Child Care and Development Block Grant program. Cause – OSSE did not have proper internal controls and policies and procedures in place to fulfill the FFATA reporting requirements. Recommendation – We recommend that OSSE evaluate its Transparency Act reporting control procedures and update them as necessary to ensure they promote compliance with the Federal regulations. These procedures should include a supervisory review of the report information before it is submitted to the System for Award Management (sam.gov) website. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – OSSE concurs with the auditor’s finding and recommendations related to this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-027 Prior Year Finding Number: 2023-032 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” In accordance with 42 CRF Section 435.912(c)(3), Timeliness and performance standard requirements - Standard for new applications and transferred accounts. Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed — (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. 42 CRF Section 435.912 (c)(4) Standard for renewals. The redetermination of eligibility at a beneficiary's regularly scheduled renewal may not exceed the end of the beneficiary's eligibility period, except as provided in paragraphs (e) and (c)(4)(i) and (ii) of this section. (i) In the case of a beneficiary who returns a renewal form less than 30 calendar days prior to the end of the beneficiary's eligibility period, the redetermination of eligibility may not exceed the end of the month following the end of the beneficiary's eligibility period. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed— (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. 42 CRF Section 435.912 (c)(5) Standard for redeterminations based on changes in circumstances. Except as provided in paragraph (e) of this section, the redetermination of eligibility for a beneficiary based on a change in circumstances reported by the beneficiary or received from a third party may not exceed the end of the month that occurs — (i) 30 calendar days following the agency's receipt of information related to the change in circumstances, unless the agency needs to request additional information from the beneficiary; (ii) 60 calendar days following the agency's receipt of information related to the change in circumstances if the agency must request additional information from the beneficiary; or (iii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis — (A) 90 calendar days following the determination of ineligibility on the current basis, for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days following the determination of ineligibility on the current basis for all other beneficiaries. 42 CRF Section 435.912 (c)(6) Standard for redeterminations based on anticipated changes. The redetermination of eligibility for a beneficiary based on an anticipated change in circumstances may not exceed the end of the month in which the anticipated change occurs, except as provided in paragraphs (e) and (c)(6)(i) and (ii) of this section. (i) In the case of a beneficiary who returns information or documentation requested pursuant to Section 435.919(b)(6) less than 30 calendar days prior to the end of the month in which the anticipated change occurs, the redetermination of eligibility may not exceed the end of the month following the month in which the anticipated change occurs. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed — (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination totaling 283,898 total population during the fiscal year 2024 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exception: • For three (3) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-027 Prior Year Finding Number: 2023-032 Compliance Requirement: Eligibility Program: U.S. Department of Health and Human Services Medicaid Cluster ALN: 93.775, 93.777, 93.778 Award #: Various Award Year: 10/01/2023 – 09/30/2024 Government Department/Agency: Department of Health Care Finance (DHCF)/Department of Human Services (DHS)/Economic Security Administration (ESA) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Medicaid State Plan: Citation 42 CFR Section 431.17AT-79-29. Section 4.7 (Maintenance of Records) states, “The Medicaid agency maintains or supervises the maintenance of records necessary for the proper and efficient operation of the plan, including records regarding applications, determination of eligibility, the provision of medical assistance, and administrative costs and statistical, fiscal and other records necessary for reporting and accountability, and retains these records in accordance with Federal requirements. All requirements of 42 CFR 431.17 are met.” Economic Security Administration (ESA) Policy Manual, Section 1.3, “All eligibility criteria and clarifying information are documented on the Record of Case Action, form 1052. The case record should speak for itself. An outside reviewer shall be able to follow the chronology of events in the case be reading the narrative. All application documents including verification and correspondence must be date-stamped. For working recipients, the record should include the dates pay is received and how often the recipient is paid. When the recipient’s statement is the best available source, the record should include the application/recipient and agency efforts to verify the information. All address changes should be documented.” In accordance with 42 CRF Section 435.912(c)(3), Timeliness and performance standard requirements - Standard for new applications and transferred accounts. Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant or individual whose account was transferred from another insurance affordability program may not exceed — (i) 90 calendar days for applicants who apply for Medicaid on the basis of disability; and (ii) 45 calendar days for all other applicants. 42 CRF Section 435.912 (c)(4) Standard for renewals. The redetermination of eligibility at a beneficiary's regularly scheduled renewal may not exceed the end of the beneficiary's eligibility period, except as provided in paragraphs (e) and (c)(4)(i) and (ii) of this section. (i) In the case of a beneficiary who returns a renewal form less than 30 calendar days prior to the end of the beneficiary's eligibility period, the redetermination of eligibility may not exceed the end of the month following the end of the beneficiary's eligibility period. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed— (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. 42 CRF Section 435.912 (c)(5) Standard for redeterminations based on changes in circumstances. Except as provided in paragraph (e) of this section, the redetermination of eligibility for a beneficiary based on a change in circumstances reported by the beneficiary or received from a third party may not exceed the end of the month that occurs — (i) 30 calendar days following the agency's receipt of information related to the change in circumstances, unless the agency needs to request additional information from the beneficiary; (ii) 60 calendar days following the agency's receipt of information related to the change in circumstances if the agency must request additional information from the beneficiary; or (iii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis — (A) 90 calendar days following the determination of ineligibility on the current basis, for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days following the determination of ineligibility on the current basis for all other beneficiaries. 42 CRF Section 435.912 (c)(6) Standard for redeterminations based on anticipated changes. The redetermination of eligibility for a beneficiary based on an anticipated change in circumstances may not exceed the end of the month in which the anticipated change occurs, except as provided in paragraphs (e) and (c)(6)(i) and (ii) of this section. (i) In the case of a beneficiary who returns information or documentation requested pursuant to Section 435.919(b)(6) less than 30 calendar days prior to the end of the month in which the anticipated change occurs, the redetermination of eligibility may not exceed the end of the month following the month in which the anticipated change occurs. (ii) In the case of a beneficiary who is determined ineligible on the basis for which they are currently receiving Medicaid (the applicable modified adjusted gross income standard described in Section 435.911(b)(1) and (2) or another basis) and for whom the agency is considering eligibility on another basis, the eligibility determination on the new basis may not exceed — (A) 90 calendar days for beneficiaries whose eligibility is being determined on the basis of disability; and (B) 45 calendar days for all other beneficiaries. Condition – During testing over beneficiary eligibility for the Medicaid benefits, we noted that the District’s Economic Security Administration (ESA) was unable to provide sufficient documentation to support the beneficiary’s eligibility determination totaling 283,898 total population during the fiscal year 2024 audit. Specifically, out of a sample of 132 participant files tested, we noted the following exception: • For three (3) participant files, ESA did not process the application within the required timeframe. The Department of Health Care Finance, as the State Medicaid Agency, lacks a quality control oversight system to ensure that eligibility documentation and verification is maintained to support the eligibility decision. Questioned Costs – Not determinable. Context – This is a condition identified per review of ESA’s compliance with specified requirements using a statistically valid sample. Effect – Lack of supporting documentation for program services and noncompliance with program requirements could result in disallowances of costs and participants could be receiving benefits that they are not entitled to receive under the program. Cause – DHCF and ESA did not appear to adhere to internal control procedures to ensure that applications are properly processed in accordance with Federal Regulations. Recommendation - We recommend that ESA strictly implement internal control procedures to ensure that documentation is maintained to support the beneficiary determinations. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – ESA concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-034 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430 (g): Standards for Documentation of Personnel Expenses. (1) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient; (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition – We noted that the DBH allocated payroll expenditures to the Block Grants for Substance Use Prevention, Treatment and Recovery Services (SUPTRS) during fiscal year 2024 based on budgeted percentages. These percentages were entered into the PeopleSoft Human Resources/Payroll System (PeopleSoft) at the beginning of the fiscal year and were based on management’s estimate of the respective employee’s level of effort for each program. PeopleSoft calculated the payroll costs every payroll cycle for each employee and program based on the predetermined percentage, and reported it through the Labor Distribution Report (485 Report). However, management cannot provide supporting documentation regarding the periodic comparison of actual costs to the budgeted costs as required by 2 CFR Section 200.430. Specifically, 17 out of 60 sampled payroll items tested for the SUPTRS program were recorded based on estimated hours and not actual hours. For the other 43 sampled items, these individuals worked 100% of their time on SUPTRS, therefore, there is no possibility of error. Questioned Costs – Known amount is $43,235. Context – This is a condition identified per review of DBH’s compliance with specified requirements using a statistically valid sample. Payroll costs, including fringe benefits, for the SUPTRS program in fiscal year 2024 totaled $4,667,478. Effect – DBH was unable to demonstrate that the payroll expenditures charged to the SUPTRS program accurately reflected the actual time incurred on the program and such expenditures were properly supported in accordance with 2 CFR Section 200.430, Compensation – Personal Services. Cause – DBH does not have policies and procedures in place to review and reconcile the estimated amount of payroll expenditures charged to the SUPTRS Program to the actual expenditures incurred. Recommendation – We recommend that DBH deploy policies and procedures to periodically compare employees’ estimated hours per the 485 Report to the actual hours incurred, and make any necessary adjustments as required by 2 CFR Section 200.430. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH agrees with the findings and will put controls in place to resolve the issue. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-035 Prior Year Finding Number: N/A Compliance Requirement: Matching, Level of Effort, Earmarking Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Earmarking requirement: a) The state shall expend not less than 20 percent of Substance Use Prevention, Treatment and Recovery Services Block Grant (SUPTRS BG) for primary prevention programs for individuals who do not require treatment for Substance Use Disorder (SUD). The programs should educate and counsel the individuals on such SUD and provide for activities to reduce the risk of such SUD by the individuals (42 USC 300x-22; 45 CFR Sections 96.124 (b)(1) and 96.125). b) Designated states (i.e., any state whose cases of Acquired Immunodeficiency Syndrome (AIDS) is 10 or more per 100,000 individuals (as indicated by the number of such cases reported to and confirmed by the Centers for Disease Control and Prevention for the most recent calendar year for which data are available)), shall expend not less than two percent and not more than five percent of the award amount to carry out one or more projects to make available to individuals early intervention services for HIV disease (EIS HIV) at the sites where the individuals are undergoing SUD treatment. c) The state may not expend more than five percent of the grant to pay the costs of administering the grant (42 USC 300x-31; 45 CFR Section 96.135 (b)(1)). Condition – DBH did not provide the necessary documentation to support compliance with earmarking requirements as described above. As a result, we were unable to verify whether DBH met the required thresholds. Questioned Costs – Not determinable. Context – This is a condition identified per review of DBH’s compliance with earmarking requirements. Effect – Without adequate internal controls to ensure proper documentation of the requirements, it may increase the risk that earmarking requirements may not be met. Cause – DBH does not have adequate internal controls requiring the retention of documentation related to earmarking compliance requirements. Recommendation – We recommend that DBH strengthen its policies and procedures to ensure that all earmarking requirements thresholds are properly documented. DBH should ensure that detailed reconciliations, expenditure reports, and applicable source documents are maintained for audit purposes. Related Noncompliance – Material noncompliance. Views of Responsible Officials and Planned Corrective Actions – DBH concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
Finding Number: 2024-036 Prior Year Finding Number: N/A Compliance Requirement: Reporting Program: U.S. Department of Health and Human Services Block Grants for Substance Use Prevention, Treatment, and Recovery Services ALN: 93.959 Award #: Various Award Years: 10/01/2022 – 09/30/2024; 03/15/2021 – 03/14/2025 Government Department/Agency: Department of Behavioral Health (DBH) Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. The Uniform Guidance in 2 CFR Section 200.302(a), Financial Management, states that each state must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the state’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition – Subrecipient expenditures, totaling approximately $1.1 million, which are required to be presented in the Schedule of Expenditures of Federal Awards (SEFA), were improperly excluded from the initial SEFA prepared by management. Subsequently, the SEFA was adjusted by DBH to reflect the subrecipient expenditures incurred for the program. Questioned Costs – None. Context – This is a condition identified per review of DBH’s compliance with reporting requirements. Effect – Failure to properly review and present expenditures can result in noncompliance with reporting requirements. Cause – DBH did not comply with their policies and procedures to ensure accuracy of the SEFA. Recommendation – We recommend that DBH adhere to instituted policies and procedures to ensure the accuracy of the SEFA. Related Noncompliance – Noncompliance. Views of Responsible Officials and Planned Corrective Actions – The DBH Office of the Chief Financial Officer (OCFO) concurs with this finding. The District’s corrective action is described in the Management’s Corrective Action Plan included as Appendix B of the attached Management’s Section.
nadequate Tenant File Documentation and Inconsistencies in MTW Housing Assistance and Public Housing Records (ALN 14.881) Condition: During tenant file testing for both the Housing Choice Voucher (HCV) and Public Housing (PH) components of the Moving to Work (MTW) Demonstration Program, we identified multiple deficiencies in the Authority's documentation and reporting practices:1. For the MTW HAP (HCV) sample, the Authority did not properly complete the "Summary Decision on the Unit" section of the HUD Form 52580-A, which documents the final pass or fail outcome of the Housing Quality Standards (HQS) inspection. As a result, it could not be confirmed whether the unit met HQS requirements at the time of assistance. 2. In six out of twenty-three HCV tenant files tested, housing assistance payments did not agree with the amounts reported on HUD Form 50058, and no reconciliations or explanations were provided. 3. For one out of twenty-three HCV tenants, the Authority was unable to provide a Form 50058 covering the period for which the HAP payment was selected, leaving the payment unsupported. 4. In the MTW Public Housing sample, five out of seventeen tenant files contained discrepancies between tenant receipts or rent register balances and the amounts reported on HUD Form 50058, without adequate explanation or reconciliation. 5. For one out of seventeen Public Housing tenants, the Authority was unable to provide any support for either the receipt from or payment to the tenant for the period tested.Criteria: Under 2 CFR §200.302 and §200.303, the Authority must maintain financial management systems and internal controls sufficient to ensure that costs are allowable, supported, and in compliance with program requirements. The MTW Operations Notice and HUD program rules require PHAs to complete and retain accurate HUD Forms 50058 and 52580-A to support rent calculations, assistance payments, and unit eligibility. The Summary Decision on the Unit section of Form 52580-A is critical to documenting compliance with HQS requirements before assistance can begin or continue. Cause: The Authority lacked effective internal controls and monitoring procedures over tenant file documentation, rent calculation, inspection recordkeeping, and HUD form completion and retention. Effect: Failure to properly complete HQS documentation may signal noncompliance with unit inspection requirements and tenant safety standards, while inconsistencies and missing Forms 50058 undermine the reliability of rent and assistance calculations. Additionally, the absence of supporting documentation for tenant receipts or HAP payments results in unsupported costs, increasing the risk of overpayments, underpayments, or questioned costs under the MTW program. Questioned Costs: $378,340 Recommendation: The Authority should establish procedures to ensure that all required forms, including HUD 50058 and 52580-A with completed Summary Decision sections, are accurately filled out and retained in tenant files. Regular reconciliations between payment records, rent ledgers, and HUD reporting systems should be performed to maintain data integrity. Additionally, staff should receive training on HQS documentation, rent and assistance calculations, and federal recordkeeping requirements. To reinforce compliance with MTW and HUD program rules, periodic internal reviews of tenant files should also be conducted.Reply and Corrective Action Plan: The Authority will implement procedures to ensure that HUD Form 52580-A is fully completed for all HQS inspections, establish reconciliation processes for HAP and tenant rent payments against HUD Form 50058, and document any discrepancies. These steps aim to improve the accuracy and completeness of tenant records.
Finding F2024-004 – Missing approval of timesheet Assistance Listing Number: 93.575 Assistance Listing Program Title: California State Preschool Program (CSPP) Federal Agency: U.S. Department of Labor Pass Through Entity: California Department of Education Federal Award Number: CSPP-3192-0 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: A. Activities allowed / unallowed B. Allowable costs/cost principles Criteria The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provide 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 In performing allowable costs testwork, we noted that 1 out of 25 timesheets selected for testwork was missing evidence of the supervisor’s approval. Cause The timecard missing the supervisor’s approval resulted from a payroll system restriction that prevents supervisors from viewing employee information, including timecards, for employees who are on leave. This is in place to prevent a supervisor from contacting an employee on approved leave and to assure El Proyecto remains compliant with applicable employment laws and regulations while an employee is on approved leave. This system restriction resulted in the supervisor being unable to approve the employee’s timecard. Effect Lack of review and approval of timesheets could lead to unallowed costs being charged to the program. Questioned Costs None. Recommendation We recommend that El Proyecto implement additional controls to ensure the timesheet related to the actual hours worked for individuals who go on medical leave during a pay period are reviewed and approved. This will help ensure that payroll charges are accurate and that only allowable costs are charged to the grant. Views of Responsible Officials and Planned Corrective Actions El Proyecto will update the standard operating procedure for approving timecards while an employee is on leave while remaining compliant with applicable employment laws and regulations. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: August 31, 2025
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
2024-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFederal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All awards presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None Statement of Condition During our audit, we reviewed the Coalition’s federal-grants report for the fiscal year and identified the grants, Assistance-Listing numbers (AL #s), expenditure amounts, and all other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). Finance staff subsequently confirmed the SEFA; however, additional federal expenditures and mis-grouped grant costs were found during later reviews. Criteria2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, errors in SEFA preparation could affect the major federal program determination and lead to noncompliance with 2 CFR 200 Subpart F, which in turn could result in a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2025 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 19, 2025 (Final copy of the SEFA will not be given to the auditors until requested for the Audit).Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.