Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2024 to June 30, 2025 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: During our testing, we noted the College did not have a formal review of their monthly reconciliations related to Direct Loans, Pell, SEOG, and FWS. Likewise, the College did not have a formal review of their award packaging during the 2024-25 academic year, R2T4 calculations, direct payment of FSA credit balances to students, and FISAP. Questioned Costs: None Context: The College did not have proper internal controls in place during the 2024-25 academic year to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Cause: The College's processes and controls were not formally documented during the year as they had limited personnel in the financial aid department in order to maintain proper segregation of duties. Effect or Potential Effect of Finding: The College is not in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Repeat Finding: Yes, see finding 2024-002. Recommendation: We recommend the College review and formalize its procedures to ensure that internal controls are in place to identify and correct any inconsistencies throughout the year. Views of Responsible Officials: There is no disagreement with the audit finding.
2025-004: Equipment Management U.S. Department of Education Passed through Missouri Department of Elementary and Secondary Education Education Stabilization Fund, Assistance Listing No. 84.425D (COVID-19—Elementary and Secondary School Emergency Relief Fund), 84.425U (COVID-19—American Rescue Plan-Elementary and Secondary School Emergency Relief), 84.425W (COVID-19—American Rescue Plan-Elementary and Secondary School Emergency Relief-Homeless Children and Youth) Federal award years 2023-2025 Criteria: The Uniform Guidance (2CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Also, in accordance with 2 CFR section 200.313(d)(1), property records must be maintained that include a description of the property, a serial number of other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. In accordance with 2 CFR section 200.313(d)(2), a physical inventory of equipment and property must be taken, and the results reconciled with the property records at least once every two years. Condition: During the fiscal year 2024 audit, it was previously reported that the District’s controls were not operating effectively to reasonably ensure the District had maintained property records with the above required information, nor had it performed the required physical inventory of equipment within the two previous years. During fiscal year 2025, the District incorporated processes and controls over equipment management that met the property record requirements. The District also performed a physical inventory during fiscal year 2025 that included counting and reconciling approximately half of the District’s equipment and property within this grant program. Therefore, the District had not yet met the requirements of performing a physical inventory of all equipment and property within the previous two years. Cause: Given the timing of when the District incorporated its processes and controls, insufficient time remained to perform a physical inventory of all the District’s equipment and property within this grant program, and only approximately half of the items were subject to the physical inventory. Effect or potential effect: The District is not in compliance with federal grant requirements over the physical inventory of equipment. Improper equipment procedures could result in actions taken by oversight agencies which could impact future funding. Questioned costs: None Context: As noted above, the District updated its property records for all its property and equipment, and then approximately half of the District’s property and equipment was subject to a physical inventory. Identification as a repeat finding, if applicable: 2024-004 and 2024-006. Recommendation: We recommend the District continue to perform the processes and controls it added during fiscal year 2025, and complete the inventory count for the remaining items, to be compliance with the federal grant 2 year cycle. View of responsible officials: Management agrees with this finding.
Department of Health and Human Services Federal Financial Assistance Listing #93.044/93.045/93.053 – Aging Cluster Matching, Level of Effort, Earmarking Material Weakness in Internal Control Over Compliance and Noncompliance Deemed Not Material Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Agency calculated the value of its in-kind contributions, which were included in the Agency’s matching calculation, using the State of Nebraska minimum wage. The calculations contained errors as the wage rate used was not properly updated. Cause: The Agency’s internal controls in place to review the calculation of the valuation of the in-kind contributions did not identify errors in the calculation. Effect: The matching calculation was understated for all months reported for the fiscal year ended June 30, 2025 as the wage rate used had not been updated since 2022. The result of the errors did not result in material noncompliance as sufficient matching funds were obtained from other sources. Questioned Costs: None. While there were errors in the calculation of the valuation of in-kind volunteer hours, the errors did not impact federal funds awarded, nor did they have an impact on the Agency’s compliance with the required minimum matching calculation. Context: Three out of twelve monthly reports which included the in-kind contribution calculation were tested. Errors in the testing were identified in all three months tested. Repeat Finding from Prior Years: No. Recommendation: We recommend that management implement policies and internal control procedures to ensure the proper value is assigned to in-kind contributions. Views of Responsible Officials: Management agrees with the findings. Subsequent to year-end, management has implemented a control process whereby the in-kind calculation is checked against the current State of Nebraska minimum wage rate.
8. Criteria or specific requirement: Per Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200) Subpart D, Post Federal Award Requirements Section 200.303, Internal controls, the recipient must establish, document and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Per 7 CFR Section 210.8(a), the school food authority shall establish internal controls which ensure the accuracy of meal counts prior to the submission of the monthly claim for reimbursement. 9. Condition: Two (2) monthly claims for reimbursement reported meal counts less than those supported by records of the District. One (1) monthly claim for reimbursement reported meal counts in excess of those supported by records of the District. 10. Cause: The District's internal controls over compliance were not functioning effectively to ensure claims for reimbursement were accurately prepared. 11. Effect: The District was not in compliance with the reporting compliance requirement. 12. Questioned Costs: The following questioned costs were computed based on the excess meals claimed for reimbursement times the applicable reimbursement rate: $170 (Project No. 25-4220-00) $499 (Project No. 25-4210-00) 13. Context: From the population of eleven (11) monthly claims for reimbursement, a sample of four (4) claims were selected for testing. We noted two (2) months in which the claims for reimbursement reported meal counts less than those supported by records of the District. We noted one (1) month in which the claims for reimbursement reported meal counts in excess of those supported by records of the District as follows: February 2025: Actual meals served: 17,752; Meals claimed for reimbursement: 17,922. 14. Recommendation: We recommend that management review its policies and procedures and implement changes to strengthen internal control over compliance. 15. Management's response: The District agrees with the auditor's finding and recommendation.
Federal Agency: U.S. Department of Transportation Federal Program Name: Airport Improvement Program Assistance Listing Number: 20.106 Federal Award Identification Number and Year: Multiple Award Period: 8/23/2020 –1/28/2029 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to the Federal Aviation Administration's Advisory Circular 150-1500-19D, Guide for Airport Financial Reports Filed by Airport Sponsors, Financial Reports 5100-126 & 5100-127 "are due within 120 days of the end of the airport's fiscal year. A sponsor may request an automatic 60-day extension on the website. An airport that cannot file within the 60-day expensive should send a written explanation to Airport Compliance and Management Analysis" of the FAA. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure timely report submission. Management 's Progress for Repeat Findings: This is a repeated and modified finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: None Context: During our testing, it was noted that two of the six financial reports were not submitted timely. Form 5100-126 and Form 5100-127 were submitted on 02/26/2025 and 02/28/2025, respectively. These submissions occurred 61 and 63 days beyond the prescribed filing deadline of 180-days following the fiscal year end. Cause: Management oversight. The City did not submit the performance report by the due date. Effect: The auditor noted an instance of noncompliance. Noncompliance results in untimely submission of information to the federal agency. Recommendation: We recommend the City establish a reporting calendar and perform periodic reviews of the completeness, accuracy and adherence to the reporting calendar. Management Response: The City concurs with the finding. Beginning in December 2025, the Aviation Revenue and Finance Officer has implemented an internal control to strengthen compliance with federal reporting requirements. A centralized spreadsheet has been created to track all required financial report deadlines, including FAA Forms 5100-126 and 5100-127. This spreadsheet identifies the due dates, responsible personnel, and submission status to help ensure reports are prepared, reviewed, and submitted timely in accordance with applicable federal regulations. The Aviation Revenue and Finance Officer will also perform periodic reviews of the reporting calendar to monitor completeness, accuracy, and compliance to required deadlines. Timeline and Responsible Position: June 2026 – Aviation Department Revenue and Finance Officer
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Federal Award Identification Number and Year: M20-MC350209 - 2020 M21-MC350209 - 2021 Award Period: 5/29/2020 - 9/01/2028 8/03/2021 - 9/01/2029 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §200.403 Factors affecting allowability of costs of 2 CFR Part 200, costs must conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. Additionally, according to §200.431 costs of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences should be equitably allocated to all related activities, including Federal awards. Condition: During our testing, we noted the City did not have adequate internal controls designed to ensure proper allocation of fringe benefits. Management 's Progress for Repeat Findings: This is a repeated and modified finding. While the City has improved its efforts, there are still opportunities for improvement to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements as well as compliance with City policy. Questioned costs: $973.77 Context: During our testing, it was noted that for one of twenty-four samples, the City applied incorrect fringe benefits to the grant, resulting in $371.11 that should have been allocated to the grant. Additionally, for one of twenty-four samples, the City did not accurately apply sick leave conversion to wages, resulting in $973.77 of wages improperly allocated to the grant. Cause: Management oversight. The city did not have adequate controls in place to ensure proper allocation of fringe benefits. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential pay back of federal funds. Recommendation: We recommend the City review fringe benefits charged to the grant to equitably allocate fringe benefits between federal and city funding sources. Management Response: The City concurs with the finding. The Department of Health, Housing & Homelessness will review the allocation of fringe benefits to grant payroll charges on a quarterly basis to ensure fringe benefits are properly allocated to funding sources. The reconciliations will be prepared by fiscal staff and approved by the Fiscal Manager. Additionally, the DFAS Grant Administrator will perform a semi-annual review of excess leave payouts to ensure they are charged to the correct grant funding string. Timeline and Responsible Position: June 2026 – Department of Health, Housing and Homelessness Fiscal Manager
Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Continuum of Care Assistance Listing Number: 14.267 Federal Award Identification Number and Year: NM0014L6B002316 NM0015L6B002316 NM0017L6B002215 NM0101L6B002308 NM0156L6B002200 Award Period:7/1/24-6/30/25 7/1/24-6/30/25 10/1/23-9/3/24 7/1/24-6/30/25 10/1/23-9/3/24 Type of Finding: • Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §200.306 The fair market value of third-party in-kind contributions must be documented and, to the extent feasible, supported by the same methods used internally by the recipient or subrecipient. Condition: During our testing, we noted the City lacked sufficient internal controls to ensure subrecipients complied with cost‑sharing and matching requirements. We also noted that the City did not maintain documentation to substantiate the fair market value of in‑kind contributions. Questioned costs: None Context: During our testing, we noted the following: • For one of 5 samples tested, we noted the City did not have sufficient documentation for the values placed on in-kind contributions. • For 5 of 5 samples tested, the City only performed one monitoring review of subrecipient related match expenditures, resulting in partial coverage of the award period. Additionally, there was a lack of documentation of the City's process for selecting match samples to review. Finally, there was no review performed at the close out of the grant to ensure the subrecipient met the match requirement. • For 5 of 5 grant awards tested, we noted the amount of match reported on the HUD Annual Performance Report (APR) did not agree to underlying City records. Cause: Management oversight. The City did not have adequate controls in place to ensure proper monitoring of matching expenditures for subrecipients. 2025 – 007 Matching/Cost Sharing (continued) Effect: The auditor noted instances of noncompliance. Recommendation: We recommend the City design controls to ensure monitoring occurs related to subrecipient's adherence to the Continuum of Care program's Match requirements and the eligibility of the program's match expenditures. Additionally, we recommend implementing a tracking mechanism to ensure match expenditures are accurately reported to HUD. Management Response: The City concurs with the finding. The City will update Continuum of Care procedures related to subrecipient monitoring, in-kind contribution documentation, match tracking and reporting, and grant closeout review to strengthen compliance and oversight. Additionally, the City will provide additional grants training and a list of subject matter experts within each department that can work with auditors during the single audit. Timeline and Responsible Position: June 2026 – Department of Health, Housing and Homelessness Deputy Director of Social Services and Connections and Department of Finance & Administrative Services Grant Administrator
Management acknowledged its responsibility to establish and maintain effective internal controls to reasonably assure compliance with federal statutes, regulations and terms and conditions of federal awards and controls relating to preparing the Schedule of Expenditures of Federal Awards (the Schedule), as required by Uniform Guidance (2 CFR § 200.303(a)), in the audit engagement letter. Furthermore, Uniform Guidance (2 CFR Subpart F § 200.510(b)) requires the auditee prepare the Schedule for the period covered by the District’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. Due to insufficient controls over the monitoring of grant activity, the District did not retain appropriate support on the dates of the determination to charge prior year costs to the American Rescue Plan Elementary and Secondary School Emergency Relief Fund (ARP ESSER) grant in the amount of $678,544. The grant award was for $1,019,060, which had a grant period spanning calendar years 2020 through 2024. Lack of maintaining such documentation could result in expenditures determined to be unallowable under grant guidelines and funds required to be returned. Ineffective internal controls related to federal grants could lead to noncompliance with program requirements. Additionally, the determination of unallowable costs could have an adverse effect on future grant awards by the awarding agency or agencies in addition to an inaccurate assessment of major federal programs that would be subjected to audit. District management should implement a system to review the Schedule for errors and omissions as well as a method to monitor the related internal controls over compliance with federal grant requirements. This will help ensure the Schedule is complete and accurate, major federal programs are accurately identified for audit, and internal controls over compliance requirements are implemented and operating effectively.
Coronavirus State and Local Fiscal Recovery Funds: Material Weakness in Internal Control Over Reporting Condition: During our testing of reporting requirements, we noted that the Organization did not have adequate internal controls established to ensure the submission of complete and accurate required reports. We noted that reports were prepared by one individual without supervisory review or approval, and no other adequate internal control could be identified. Criteria: The Uniform Guidance (2 CFR 200.303) requires entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the award. Cause: Management has not established procedures requiring review of reports prior to submission. Effect: As a result of the lack of internal controls over reporting, reports may be submitted with inaccurate information. Although no noncompliance was identified, this lack of internal controls increased the risk of inaccuracies not being detected and corrected. Context: The population subject to reporting requirements included one report. The sample size of one report was determined. Recommendation: We recommend that management implement internal control procedures over reporting, including supervisory review and approval of reports prior to submission. Views of Responsible Officials: Management agrees with the finding.
Section III – Federal Award Findings and Questioned Costs Finding Reference Number: 2025-006 Federal Agency: Department of Health and Human Services (DHHS) Program Name: Research and Development Cluster ALN: 93.778 Award Number: GSA 22-630-8000-0015 Federal Award Year: 2024-2025 Compliance Requirement: Allowable Costs Condition: During our testing over allowable fringe expenditures, we identified a transaction in which the fringe expenditure charged to the grant was incorrectly calculated resulting in the overstatement of fringe expenditures. Specifically, we tested 40 fringe samples and noted 1 sample in which the FICA expense was incorrectly calculated resulting in an overstatement of FICA expenditures charged to the grant of $1,245.93. Criteria: Per 2 CFR section 200.430(a), costs of compensation for personal services are allowable to the extent the total compensation for individual employee is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both federal and nonfederal activities. Per 2 CFR § 200.303 requires the recipient of federal funds to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effect: UNM claimed and received payment on an unallowable expenditure under the grant agreement of $1,245.93. Cause: While management’s review over payroll adjustments ensures reversals were fully offsetting against the original payroll entry in total, the review did not properly ensure that reversals were fully offsetting against the original payroll entry at the index-account level (individual grants are tracked via index accounts). Questioned Costs: $1,245.93. Represents the difference between the actual FICA expenditure charged to the grant and that calculated using the gross pay allocated to the grant and the applicable FICA rate. Repeat Finding: No Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Auditor’s Recommendation: We recommend that UNM revise its’ procedures related to the review of payroll and fringe adjustments to ensure that reversing entries are completely and accurately reversed at the index-account level as opposed to performing the review in aggregate.
2025-001—Error in Reporting for National Student Loan Data System (NSLDS) U.S. Department of Education Student Financial Assistance Programs Cluster (Direct) Federal Direct Loan Program (84.268) Federal Award Year: 2024-2025 Repeat Finding: Yes Criteria The Code of Federal Regulations (34 CFR 685.309) requires enrollment status changes for students be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Regulations require the status include an accurate effective date. According to the NSLDS Enrollment Reporting Guide, a student’s Program-Level enrollment status should be reported with the same enrollment status as that student’s campus-level enrollment status for all programs the student is enrolled in at that location, even if the student is not currently taking coursework that applies to a particular program. If the student has withdrawn or graduated from an academic program, a “terminal enrollment status” of ‘W’ or ‘G,’ as appropriate, should be reported for that program, even if the student is still taking coursework applicable to other programs in which the student is enrolled. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure enrollment reporting is completed properly. Condition The College did not properly report the student enrollment change for students who received federal student aid to the NSLDS. The College did not timely report three students’ Program-Level or Campus-Level enrollment status change to NSLDS. Out of the 25 students tested, we noted 3 students (12%) whose status change at the Program-Level and Campus-Level was not timely reported to NSLDS. Cause The College did not have adequate controls related to the process of enrollment reporting, which is required under Uniform Grant Guidance. An additional submission to the NSLDS was required for two students who withdrew and one student who was incorrectly marked as not reportable to NSLDS. Both changes were reported outside the allowable window of reporting noted above. Effect Noncompliance with federal regulations could result in the loss of future federal funding. Context We tested 25 students who received federal student aid with enrollment changes. For each student tested, management provided documentation from NSLDS showing when the student’s status changed, and when it was reported. Out of the 25 students tested, we noted 3 students (12%) whose status change at the Program-Level and Campus-Level was not timely reported to NSLDS. Questioned costs There were no questioned costs with respect to this finding. Recommendation We recommend the College review current processes and implement updated processes and controls for reporting to NSLDS, implementing procedures to ensure submissions are reported timely and accurately. Views of responsible officials Management agrees with this finding. See corrective action plan.
2025-003—Graham Leach Bliley Act – Student Information Security U.S. Department of Education Student Financial Assistance Programs Cluster (Direct) Federal Work Study Program (84.003) Federal Pell Grant Program (84.063) Federal Perkins Loan Program (84.038) Federal Supplemental Educational Opportunity Grants (84.007) Federal Direct Loan Program (84.268) Federal Award Year: 2024-2025 Repeat Finding: Yes Criteria The Code of Federal Regulations (2 CFR 200.303(a)) requires that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Program Participation Agreement (PPA) with the U.S. Department of Education requires the institution to comply with the Standards for Safeguarding Customer Information as described in 16 CFR Part 314 which includes the development of a comprehensive written security program that includes the following parts: • 16 CFR 314.4(a) requires institutions to designate a qualified individual responsible for overseeing and implementing the institution’s information security program and enforcing the information security program. • 16 CFR 314.4(b) requires institutions to provide for the information security program to be based on a risk assessment that identifies reasonably foreseeable internal and external risks to the security, confidentiality and integrity of customer information (as the term customer information applies to the institution) that could result in the unauthorized disclosure, misuse, alteration, destruction or other compromise of such information, and assesses the sufficiency of any safeguards in place to control these risks. • 16 CFR 314.4(c) requires institutions to provide for the design and implementation of safeguards to control the risks the institution provides through its risk assessment • 16 CFR 314.4(d) requires institutions to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented. • 16 CFR 314.4(e) requires institutions to develop policies and procedures to ensure that personnel are able to enact the information security program. • 16 CFR 314.4(f) requires institutions to develop policies and procedures to oversee its information system service providers. Condition The College’s written information security program did not include the following elements required by regulation as agreed to in the PPA: • The College has performed a risk assessment utilizing internal resources but has not fully integrated the information security program on the results of this assessment, nor has the College included all required elements of internal and external risks to the security, confidentiality or integrity of customer information. The College’s risk assessment is in the process of implementing an inventory of IT systems that process and store customer information and the compliance with information security elements related to multifactor authentication, access control, change management, logging and alerting and encryption. • The College has not identified, designed or implemented safeguards for all of the risks identified in the risk assessment. The safeguards do not include the identification of security events the detection and response capabilities to support incident response is still being developed. • The College has not been able to test safeguards because safeguards have not been fully designed or implemented in response to the risk assessment. • The College has not developed written policies and procedures to ensure that personnel are able to enact the information security program. There is a lack of evidence of leadership being required to report to the board or an appropriate supervisory council to ensure those charged with governance are informed on the current state of the information security program. Cause The College’s information security policy did not include all of the required elements, in line with the Gramm-Leach-Bliley Act. Effect Noncompliance with federal regulations could result in the loss of future federal funding. Questioned costs There were no questioned costs with respect to this finding. Context Under a College’s PPA with the U.S. Department of Education, institutions must protect student financial aid information, with particular attention to information provided to institutions by the U.S. Department of Education or otherwise obtained in support of the administration of federal student financial aid programs Recommendation We recommend the College complete these requirements, in order to be compliance with the Gramm-Leach-Bliley Act. Views of responsible officials Management agrees with this finding. See corrective action plan.
U.S. Department of Health and Human Services - 93.600 Head Start 2025-002 Lack of Documented Approval Criteria: Per 2 CFR §200.303, the entity must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the entity is managing the award in compliance with federal statutes, regulations, and the terms and conditions of the award. Adequate documentation of approvals is a fundamental internal control to ensure expenditures are necessary, allowable, and properly authorized. Condition: During our testing of expenditures charged to the Head Start program funded by the U.S. Department of Health and Human Services, we noted that the Organization did not maintain documented evidence of management approval prior to incurring or paying costs. The transactions reviewed lacked documented authorizations, supervisor sign-offs, or other documentation showing formal approval. Cause: The lack of documented approval appears to be due to inconsistent application of internal controls and the absence of a standardized process for documenting expenditure authorization for federal programs. Effect: Without documented approval, there is an increased risk that unallowable or unauthorized expenditures could be charged to the federal award. It also weakens the audit trail and compliance with Uniform Guidance requirements. Questioned Costs: None noted. Recommendation: We recommend the Organization implement and enforce a formal process requiring documented pre-approval of all expenditures charged to federal programs. This may include standardized approval forms or electronic workflows that clearly demonstrate appropriate review and authorization prior to payment. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has implemented various approval and documentation procedures.
2025-001 - REPORTING (REPEAT OF PRIOR YEAR FINDING 2024-002)- Federal Program Information: Federal Agency and Program Name- U.S. Department of Labor WIOA Cluster Federal Assistance Listing Number - 17.258/17.259/ 17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Board is required to submit MACC reports to WorkForce WV on a monthly basis. Condition: During our testing of reporting, for all MACC reports selected for testing management could not provide adequate support that the MACC reports were properly reviewed and approved prior to being submitted. Questioned Costs: unknown Context: Total federal expenditures for the WIOA Cluster were $1,115,599 for the year ended June 30, 2025. Cause: The Board did not have adequate policies and internal controls in place to ensure that all required reports for the WIOA Cluster were reviewed and approved prior to submission. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board design and implement controls to ensure that all required reporting is submitted accurately and in a timely fashion, with proper review and approval prior to submission. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2025-002 – ELIGIBILITY (REPEAT OF PRIOR YEAR FINDING 2024-004) - Federal Program Information: Federal Agency and Program Name - U.S. Department of Labor WIOA Cluster. Federal Assistance Listing Number - 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions of the Workforce Innovation and Opportunity Act (WIOA), “A person is eligible to receive services under Youth Activities if they are an out-of school youth or an in-school youth (29 USC 3164(a)(1), 128 Stat. 1504)”, and meet the definition of such as defined in the Uniform Guidance. Condition: During our testing of WIOA participants, it was noted that for one of the six youth participants selected for testing the WIOA intake application was not signed by the case manager. Questioned Costs: Unknown. Context: Total federal expenditures for the WIOA Cluster were $1,115,599 for the year ended June 30, 2025. Cause: The Board’s policies and procedures are not sufficient to ensure that all participant applications are complete and approved for eligibility prior to disbursement of federal funds. Effect: Youth Activities participant(s) may be granted access to the Board’s program when they do not meet the prescribed eligibility requirements. Recommendation: We recommend that the Board thoroughly review all applications for Youth Activities to ensure that all required eligibility documentation is completed and properly approved. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2025-003 – EARMARKING - Federal Program Information: Federal Agency and Program Name - U.S. Department of Labor WIOA Cluster. Federal Assistance Listing Number - 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities: (1) A minimum of 75 percent of the Youth Activity funds allocated to states and local areas, except for the local area expenditures for administration, must be used to provide services to out-of-school youth (29 USC 3164(a)(4)(A), 128 Stat. 1506). (2) Not less than 20 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, must be used to provide paid and unpaid work experiences (29 USC 3164(c)(4)), WIOA, 128 Stat. 1510). Condition: During our testing of the earmarking requirements for the Youth Activities, we noted that approximately 13 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, was used to provide paid and unpaid work experiences, which is not in compliance with the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities. Questioned Costs: Unknown. Context: Total federal expenditures for the WIOA Cluster were $1,115,599 for the year ended June 30, 2025. Cause: The Board’s policies and procedures are not sufficient to ensure that the Board is managing Federal awards in compliance with the provisions set by the Uniform Guidance. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board regularly review the grant expenditures for each of its programs and activities to ensure that all requirements for earmarking within the Uniform Guidance are met. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
Material weakness in internal control over compliance - Lack of control over monitoring of maintenance of effort Federal Program: Title I, Part A, Improving Basic Programs (ALN 84.010A) Federal Agency: U.S. Department of Education Pass-through Entity: Texas Education Agency (24610101158901 and 25610101158901) Compliance Requirement: G - Matching, Level of Effort, Earmarking Criteria: According to the Uniform Guidance (2 CFR 200.303), non-federal entities must establish and maintain effective internal controls over federal awards to ensure compliance with applicable regulations and terms and conditions of the federal awards. Per 34 CFR 299.5, an LEA receiving funds under the applicable program must maintain fiscal effort per student of no less than 90% of the preceding fiscal year. Condition: The District could not provide the documentation demonstrating compliance with maintenance of effort. There is a limited awareness that the maintenance of effort calculation should be monitored throughout the year to ensure the District is in compliance. Cause: The District had a lack of understanding and control surrounding the maintenance of effort calculation and requirements. The District had not been preparing its own maintenance of effort calculation, therefore had no baseline to know if they were meeting the requirement of spending no less than 90% of the preceding fiscal year grant amount. Effect: Failure to perform and document maintenance of effort calculations increases the risk of noncompliance with federal requirements, which could result in potential repayment of funds or loss of future funding. Questioned Costs: No questioned costs were identified. Context: The District did not prepare the required maintenance of effort calculation. The federal program was not tested in the prior year, therefore, it has only been a known issue in the current year. The consequence of this audit finding is failure to document maintenance of effort may put the District at risk of noncompliance, which can result in questioned costs, loss of grant funding and required repayment. Recommendation: We recommend that the District assign responsibility to qualified personnel for the preparation of maintenance of effort calculations. Utilization of the calculation tools provided by TEA, including the guidance handbooks, will assist in the preparation. We also recommend the District implement procedures and provide the necessary training to qualified personnel to ensure maintenance of effort is calculated and reviewed as part of the grant monitoring process. Views of Responsible Officials: See Corrective Action Plan. None
Material weakness in internal control over compliance - Lack of control over monitoring of maintenance of effort Federal Program: Special Education Cluster (ALNs 84.027A, 84.173A) Federal Agency: U.S. Department of Education Pass-through Entity: Texas Education Agency (246600011589016600, 256600011589016600, 66002512, 2466100115890116610, 256610011589016610) Compliance Requirement: G - Matching, Level of Effort, Earmarking Criteria: According to the Uniform Guidance (2 CFR 200.303), non-federal entities must establish and maintain effective internal controls over federal awards to ensure compliance with applicable regulations and terms and conditions of the federal awards. Per 34 CFR 300.203, an LEA must budget at least the same amount from the same source as the prior year to maintain fiscal effort. Condition: The District could not provide the documentation demonstrating compliance with maintenance of effort. There is a limited awareness that the maintenance of effort calculation should be monitored throughout the year to ensure the District is in compliance. Cause: The District had a lack of understanding and control surrounding the maintenance of effort calculation and requirements. The District had not been preparing its own maintenance of effort calculation, therefore had no baseline to know if they were meeting the requirement of spending at a minimum of 100% of the preceding fiscal year. Effect: Failure to perform and document maintenance of effort calculations increases the risk of noncompliance with federal requirements, which could result in potential repayment of funds or loss of future funding. Questioned Costs: No questioned costs were identified. Context: The District did not prepare the required maintenance of effort calculation. The federal program was not tested in the prior year, therefore, it has only been a known issue in the current year. The consequence of this audit finding is failure to document maintenance of effort may put the District at risk of noncompliance, which can result in questioned costs, loss of grant funding and required repayment. Recommendation: We recommend that the District assign responsibility to qualified personnel for the preparation of maintenance of effort calculations. Utilization of the calculation tools provided by TEA, including the guidance handbooks, will assist in the preparation. We also recommend the District implement procedures and provide the necessary training to qualified personnel to ensure maintenance of effort is calculated and reviewed as part of the grant monitoring process. Views of Responsible Officials: See Corrective Action Plan.
GRANT FINANCIAL REPORTING AND ACCOUNTING CONTROLS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards, (G) Material Non-Compliance Related to Federal Awards Funding Agency: U.S. Department of Homeland Security Title: Homeland Security and Emergency Management AL #: 97.067 Award #: EMW-2022-SS-00044 EMW-2023-SS-00015 EMW-2024-SS-05231 Award Period: January 1, 2023-March 31, 2025 Compliance Requirement: Reporting Questioned Costs: None Statement of Condition The County did not maintain effective internal controls over grant accounting and financial reporting related to Operation Stonegarden. This issue impacted the Operation Stonegarden expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA). In addition, the required grant financial and performance reporting was not submitted timely or was incomplete. Specifically: [See Table in Original Report] During the audit, grant expenditures and related revenues recorded in the general ledger did not reconcile to supporting drawdown activity and grant reporting support, and did not accurately reflect actual grant activity. As a result, audit adjustments totaling $257,480 were required to correct grant expenditures and revenues. These adjustments also required revision of the SEFA. Criteria Title 2 CFR §200.303 requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Award terms / reporting requirements require timely submission of complete and accurate financial and performance reports (e.g., quarterly performance/progress reports and required narrative reports) in accordance with due dates and award conditions. Cause The County did not design and/or consistently perform effective reconciliation and supervisory review controls to ensure consistency among the general ledger, drawdown requests, grant financial/performance reports, and SEFA preparation support. Additionally, grant reporting deadlines and documentation retention requirements were not consistently monitored or enforced. Effect These deficiencies resulted in inaccurate and untimely grant reporting and required audit adjustments to grant expenditures, revenues, and the SEFA. The deficiencies increased the risk of noncompliance with federal reporting requirements, increased the risk that reported amounts and drawdowns were not supported by verified accounting records, and increased the risk of grantor monitoring actions, delayed reimbursements, and other remedies available under award terms. Recommendation We recommend that the County: • Implement formal reconciliation procedures to ensure the general ledger, drawdown requests, grant financial reports, and SEFA are reconciled and reviewed prior to submission. • Establish documented review and approval controls to ensure grant reports are accurate, complete, and submitted timely. • Ensure drawdown requests are supported by verified expenditures recorded in the general ledger. Provide training to staff responsible for grant accounting and reporting to strengthen compliance with federal and state requirements. Views of Responsible Officials Management concurs with the finding. The Operation Stonegarden grants are managed by Broken Arrow Services, LLC, who is contracted with Otero County for this purpose. For future audits, management will refer auditors directly to Broken Arrow Services, LLC for all documentation, (other than the SEFA and general ledger reports), as they maintain the most accurate and up-todate records for all reporting, purchases, and reimbursements. Broken Arrow Services, LLC has communicated to all sub-recipients the importance of submitting reports and invoices in a timely manner so that financial and performance reports can be completed and submitted to DHSEM by the required deadlines each quarter. All late submissions by sub-recipients will be tracked and follow-up efforts will be documented. The SEFA report did not include the expenditures for sub-recipients, and this was an honest oversight that will not be omitted in the future. The Finance Department will continue to prepare the SEFA and provide general ledger reports to the auditors. Finding Resolutions Timeline: Completed. December 18, 2025 Designation Of Employee Position Responsible For Meeting This Deadline: Finance Director
FEDERAL PROGRAM (ALN – 97.036) DISASTER GRANTS – PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) PASS-THROUGH: PUERTO RICO CENTRAL OFFICE OF RECOVERY, RECONSTRUCTION, AND RESILIENCY (COR3) FEDERAL EMERGENCY MANAGEMENT AGENCY U.S. DEPARTMENT OF HOMELAND SECURITY (DHS) AWARD NUMBERS PA-02-PR-4339-PW-09011(9604) (FISCAL YEAR 2021) COMPLIANCE REQUIREMENT SPECIAL TESTS AND PROVISIONS – PROJECT ACCOUNTING TYPE OF FINDING NONCOMPLIANCE AND SIGNIFICANT DEFICIENCY CRITERIA The 44 CFR Section 206.205 “Payment of Claims” state for large projects, the recipient is required to make an accounting to FEMA of eligible costs. Similarly, the subrecipient must make an accounting to the recipient. In submitting the accounting, the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. The Puerto Rico Central Office of Recovery, Reconstruction, and Resiliency (COR3), as a Pass-Through Entity, requires Subrecipients to complete and submit a Quarterly Progress Report for each Project Worksheet (“PW”) through the Disaster Recovery Solution (“DRS”) Platform. This information is then submitted to the Federal Emergency Management Agency (FEMA) for ongoing and completed projects that are accounted for in accordance with the required certification. In addition, 2 CFR §200.303 (a) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). STATEMENT OF CONDITION For purposes of the Special Test and Provision – Project Accounting testing for this program, the Institution maintains only one (1) large project identified under PW 9011. For this project, a population of four (4) quarterly reports was established, of which two (2) were selected for testing purposes for the fiscal year 2024–2025 audit. As a review of the 3rd Quarterly Progress Report for the period from April through June 2025, it was noted that the Institution reported $30,243.64 in expenditures for the period. However, upon comparison with the expenditures recorded in the Institution’s financial system, it was determined that the actual expenditures for the quarter totaled $98,481.96, resulting in a difference of $68,238.32 between the reported amount and the system records. In addition, for the requirement mentioned above, based on internal control interviews, we found that there is no designated individual responsible for independently reviewing the reports prior to submission to ensure accuracy and consistency with source data. QUESTIONED COSTS NonePERSPECTIVE INFORMATION After we received the Quarterly Progress Report, we proceeded to make a comparison between this report and the Expenditures Report issued by the Institution accounting system for each of the quarters selected, in order to validate the data accuracy. We noted that the Institution did not detect this discrepancy in the report before the submission of the required Quarterly Progress Report for the project to the pass-through entity due to the lack of adequate revision procedure. STATEMENT OF CAUSE The Institution did not have an effective internal control to ensure that the required financial information to be included as part of the preparation and submission of the Quarterly Progress Report is accurate according to their accounting system. POSSIBLE ASSERTED EFFECT The Institution did not have an effective internal control to ensure that the required financial information to be included as part of the preparation and submission of the Quarterly Progress Report is accurate according to their accounting system. IDENTIFICATION AS A REPEAT FINDING Not previously reported. RECOMMENDATION We recommend the Institution maintain an adequate Quarterly Progress Report validation control before its submission to Federal Agency. This will avoid the incorrect inclusion of erroneous data in this Federal report to the Pass-Through Entity.
Information on the federal program: Subject: Education Stabilization Fund – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Special Tests and Provisions - Wage Rate Requirements Audit Findings: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 29 CFR 5.5 states in part: (1) Minimum wages. All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics… (3)(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the (write in name of agency). 2 CFR 200 Appendix II states in part: In addition to other provisions required by the Federal agency or non-Federal entity; all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable (D) Davis-Bacon Act, as amended (40 U.S.C. 3141-3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non-Federal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.. . .” Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to design and implement an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Special Tests and Provisions – Wage Rate Requirements compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: For all six vendors sampled, the School Corporation did not include the necessary clauses for the Davis-Bacon federal wage rate requirements in their contracts. For the two larger vendors representing $3,611,973, weekly payroll reports were properly collected. For the remaining four smaller vendors, the School Corporation did not obtain the weekly payroll report certifications for the work performed totaling $148,522 for the entire audit period Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2023-007. Recommendation: We recommend the School Corporation implement a formal process to ensure the required weekly payroll reports certifications are collected and reviewed to ensure compliance with the wage rate requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Criteria or Specific Requirement: Internal Control - Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non- Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance - Per 34 CFR 690.83(b)(2), the College is required to report the disbursement dates and amounts awarded for Pell awards to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell funds to a student. Condition: The College did not report certain Pell disbursements within 15 days to COD. Questioned costs: None Context: For 1 of the 18 Pell disbursements tested across a sample of 32 students receiving Pell awards, the College did not report a disbursement within the 15 day requirement. Cause: The Pell grant was awarded after the fall semester had ended, so the College waited to make sure the student was enrolled for the spring semester before applying it. Effect: The College is not in compliance with required reporting to the Department of Education. Repeat Finding: No. Recommendation: We recommend the College ensure that a process is in place to report within 15 days, including a process to respond and report timely when there are student irregularities. Views of Responsible Officials: There is no disagreement with the audit finding.
Criteria or Specific Requirement: Internal Control - Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non- Federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: 1. The Code of Federal Regulations, 34 CFR 685.309(b) and the NSLDS Enrollment Reporting Guide, states that: Colleges must have some arrangement to report student enrollment data to the National Student Loan Data System (NSLDS) through an enrollment roster file. The college is required to report changes in the students’ enrollment status, the effective date of the status, and an anticipated completion date. Also, the Code of Federal Regulations, 34 CFR 682.610, states that college must report accurately the enrollment status of all students regardless if they receive aid from the institution or not. Colleges must have some arrangement to report student program enrollment effective date and status to NSLDS. 2. Per Section 4.4.8 of the NSLDS Enrollment Reporting Guide, the program begin date is the date the student first began attending the program being reported. Typically, this would be the first day of the term in which the student began enrollment in the program. Condition: During testing of the enrollment reporting, we identified the following errors: The change in status was not reported at the program level. The program begin date reported to NSLDS does not match the program begin date per the college’s records. Questioned costs: None Context: This condition occurred for the following: 1. The enrollment status was not reported for 3 out of 60 students. 2. The program begin date was incorrectly reported for 6 out of 60 students Cause: The college was having issues with archives not allowing the National Student Clearing house (NSC) reports to run out of colleague. The decision was made to do a mass purging of the archive file in 2023 to eliminate the issue. Months later it was realized that doing this affected the Program start date. This purging of the archives also caused transmission issues between the NSC and NSLDS which resulted in the student’s program status not being changed. Effect: Student enrollment status and program begin date was not reported accurately to NSLDS. Repeat Finding: No. Recommendation: The College should evaluate their procedures and policies related to reporting status changes and program begin dates to NSLDS and enhance as deemed necessary to ensure that accurate information is reported to NSLDS. Views of Responsible Officials: There is no disagreement with the audit finding.
SA 2025-002: Develop Written Policies and Procedures Assistance Listing Number: 20.509 Federal Program/Cluster Name: Formula Grants for Rural Areas and Tribal Transit Federal Agency: U.S. Department of Transportation – Federal Transit Administration Federal Award Number: 64BA24-02507/64CA17-02442/64HC22-02180/64RO21-01648/64TO21-01865/64MO21-01910/64HC21-01500 Federal Award Year: July 1, 2024 to June 30, 2025 Compliance Requirement Others Criteria 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Equipment Management Requirements Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e). Condition MARTA does not have comprehensive written policies and procedures concerning the following key compliance areas which are required by the Uniform Guidance: Cash Management MARTA does not have written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. Equipment and Real Property Management MARTA has an Asset Inventory Policy and Procedures, however, it does not clearly define the policies and procedures that are in place for the use, management and disposition of equipment acquired under a Federal award in accordance with 2 CFR sections 200.313(c) through (e). Cause MARTA’s reliance on informal business practices leads to inconsistencies in its internal controls. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Repeat Findings Yes, see the Summary Schedule of Prior Year Audit Findings, SA 2024‑001. The Cash Management and Equipment and Real Property Management policies have not been updated since last year’s audit. Recommendation MARTA should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action MARTA has grown substantially in the last several years. This progress includes identifying areas that need to be updated or developing new processes and documentation. MARTA has an Asset Inventory Policy and Procedures in which the purpose is to ensure that fixed assets are properly accounted for, identified, and tracked. MARTA also has Cash Handling Policy and Procedures which addresses safeguarding public funds and maximizing the available resources. This is designed to reduce the risks associated with the collection, receipts storage and reporting of cash transactions and to safeguard and maintain the security and integrity of MARTA's fiscal assets. MARTA will review and update these policies and/or create new policies to make sure that they are compliant with the Uniform Guidance. Personnel responsible: Sandy Benson, General Manager Anticipated completion date: October 2026
2025-001 Finding - Federal Award Type: Matching, Level of Effort, Earmarking - Significant Deficiency in Internal Control over Compliance. Criteria / Requirement: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish, document, and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Earmarking includes requirements that specify the minimum and/or maximum amount or percentage of the program’s funding that must/may be used for specific activities, including funds provided to subrecipients. Per the grant agreement, grantee may use up to ten percent of the total amount of grant funds awarded for the youth and adult activities for grant’s administrative costs, as allowed under the federal regulations governing these programs. Condition / Context: During the year June 30, 2025, WSI was tracking administrative cost by fund, but inadvertently had coded program expenses into the administrative fund. This error was corrected and WSI is in compliance with the earmarking requirement, however it was noted that WSI did not have a process to monitor and ensure that they were under the maximum earmark percentage allowed. Cause: WSI was aware of the requirement and has an established system to track costs but did not have procedures in place to monitor the earmarking requirement of the maximum percentage of administrative costs allowed. Effect: Failure to maintain sufficient internal controls and proper procedures may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding monitoring of the maximum earmark percentage allowed. Management’s Response: Management concurs with the finding and has developed a report to monitor WIOA administrative expenditures to ensure compliance with applicable earmarking requirements. The corrective action has been implemented prior to this report and has been incorporated into the monthly close process.
Federal Agency: U.S. Environmental Protection Agency Program Name: Greenhouse Gas Reduction Fund: Solar For All ALN: 66.959 Award Numbers: 84090501, Federal Award Year 2024 - 2025 Questioned Costs: None 2025-001: Finding: Internal Controls over Allowable Costs/Activities The Illinois Finance Authority (Authority) had weaknesses in its internal controls over reviews of allowable costs and activities. Condition: Out of the 13 payroll transactions and 4 indirect cost transactions tested for allowable activities and costs, we were unable to obtain documentation to support that controls were in place to review for allowable activities and costs prior to applying to the grant for all (100%) of the transactions. The sample was not intended to be, and was not, a statistically valid sample. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Cause: Authority officials indicated this issue was due to the size of the Authority, there was a lack of segregation of duties or documentation to support reviews. Effect: Without a proper internal control system to support reviews performed over allowable costs and activities, the Authority risks submitting unallowable costs, which could result in a loss of future funding. (Finding Code No. 2025-001) Recommendation: We recommend the Authority develop and document controls for ensuring expenditures applied to the grant are allowable. Authority’s Response: The Authority accepts single audit finding 2025-001 Internal Controls over Allowable Costs/Activities. The Authority has implemented a process and related internal controls and appropriate segregation of duties to ensure Authority financial transactions (i.e., expenditures applied to corresponding grants are allowable; month-end financial entries; etc.) are appropriately prepared, reviewed, authorized, and recorded.
2025-003 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • The SEFA incorrectly included match expenditures, requiring an reduction to the federal expenses of $324,936. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County did not have comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with the Uniform Guidance (2 CFR 200.502 and .510) accrual-basis requirements.
Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Number: S425U210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $231,730 Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Management is responsible for establishing and maintaining internal controls over its accounting records. Additionally, 2 CFR 200.303 requires the District establish and maintain internal control over the federal awards that provides reasonable assurance that the District is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Districts must submit expenditure support through the Arizona Department of Education’s (ADE) Grants Management Enterprise system for ADE to review and approve grant reimbursements. Districts must perform grant close out procedures. Condition The ESSER III Set Aside grant had a positive ending balance at year end. However, the grant should have been closed out as of 12/31/24. Cause The District's internal controls over grant close out and reporting procedures did not detect an error. Effect The District is at risk for making unallowable expenditures. The District was required to revert the unallowable funds to the grantor. Context Duplicate invoices were submitted to ADE for reimbursement, resulting in an overpayment of $231,730. In addition, the District requested and was reimbursed $28,019 in indirect costs, however, that money was not moved into the indirect cost fund until after audit procedures were performed. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should strengthen existing internal controls over grant reporting to enhance procedures that reduce the risk of unallowable expenditures. Specifically, procedures should be in place to prevent expenditures from being submitted more than once for reimbursement. Views of Responsible Officials See Corrective Action Plan.
FA 2025-001 Strengthen Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 84.027 – Special Education Grants to States 84.173 – Special Education Preschool Grants Federal Award Numbers: H027A230073 (Year: 2024), H027A240073 (Year: 2025), H173A240081 (Year: 2025) Questioned Costs: $1,283 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Special Education Cluster. Background: The Special Education Cluster (SEC), which is comprised of the Special Education Grants to States (IDEA, Part B) and Special Education Preschool Grants (IDEA Preschool) programs, was authorized under the Individuals with Disabilities Education Act (IDEA). Special Education Cluster funding is available to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepares them for further education, employment, and independent living; ensure that the rights of children with disabilities and their parents are protected; assist states, localities, educational service agencies, and federal agencies to provide for the education of all children with disabilities; and assess and ensure the effectiveness of efforts to educate children with disabilities. SEC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. SEC funds totaling $2,769,220.76 were expended and reported on the Lowndes County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2025. Criteria: As a recipient of federal awards, the School District is required to establish, document, and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs of compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with recipient’s or subrecipient’s laws, rules, or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (g)…, [as follows:] (g) 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…” Condition: A sample of 16 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • For two employees, the amount paid did not agree to supporting documentation and resulted in underpayments totaling $4,378. • For one employee, the amount paid did not agree to board-approved salary scales and resulted in the overpayment of salary and benefit amounts by a total of $1,283. Questioned Costs: Upon testing a sample of $195,182 in personnel services expenditures, known questioned costs of $1,283 were identified for payroll charges exceeding documented federal program activities, including $743 in salaries and $540 in associated benefits. Using the total personnel services expenditure population of $1,806,992 (excluding benefits payments), we project the likely questioned costs to be approximately $6,882. Cause: The identified variances resulted from isolated payroll processing errors during position changes and pay scale updates for specific positions resulting in data-entry and reconciliation discrepancies. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees associated with Special Education Cluster the appropriate amount and/or maintain documentation supporting these payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the Special Education Cluster fund as ED or GaDOE may require the School District to return funds associated with unallowable or improperly documented expenditures. Recommendation: The School District should evaluate their internal control processes related to the documentation and review of employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that Special Education Cluster employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
Assistance Listing Number, Federal Agency, and Program Name 10.558, U.S. Department of Agriculture, Child and Adult Care Food Program Federal Award Identification Number and Year 0010284 (2024) Pass through Entity N/A Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States, or the “Internal Control Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Organization lacked adequate controls to ensure the SEFA was complete and accurate. Questioned Costs N/A If Questioned Costs are not Determinable, Description of Why Known Questioned Costs were Undetermined or Otherwise Could not be Reported No questioned costs were identified as the result of this finding Identification of How Questioned Costs Were Computed N/A Context In reviewing a monitoring report from the Colorado Department of Public Health & Environment from March 2025, we noted that the program under review - Child and Adult Care Food Program for Fiscal Year 2024 2025 - was not listed on the initial SEFA provided. The report specifically identified a review of records encompassing activity from January 2025, therefore there were expenditures during the year ended June 30, 2025. Cause and Effect A lack of adequate controls over financial reporting could result in inaccuracies or incomplete information on the SEFA. Recommendation We recommend the Organization implement a formal control requiring an independent review of the SEFA to ensure all federal expenditures are reported. Views of Responsible Officials and Corrective Action Plan Management concurs with the finding. The Child and Adult Care Food Program (CACFP) was omitted from the initial Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2025. Although CACFP had been consistently reported as a federal award in prior years, an update to the SEFA preparation format eliminated the prior-year rollover/carryforward record and the year over year (YOY) comparison functionality, reducing visibility into historical program inclusion. Additionally, the executed agreement was not readily available during preparation, resulting in the program being initially misclassified as non federal without documented cross functional validation or independent review. As a result, the omission was not identified during the initial SEFA review. Federal expenditures were incurred and properly recorded during the fiscal year. The issue was limited to SEFA reporting completeness and did not constitute a compliance deficiency related to program administration, allowability, or management of federal funds. No questioned costs were identified. Corrective Action: 1. Federal Award Classification Review: Federal versus non federal classification will be reviewed by the program manager, Director of Internal Control, and CFO based on the executed agreement. Any reclassification will require documented CFO approval. 2. Annual Cross System Reconciliation: An annual reconciliation between the contract management system and the general ledger will be performed to ensure all federal awards are captured for SEFA reporting. 3. SEFA Format Standardization: The SEFA preparation schedule will be reverted to a prior year rollover format that retains carryforward data and enables year over year comparison to improve completeness review and anomaly detection. 4. General Ledger Tagging Controls: General ledger dimensional tagging has been enhanced so federally funded activity is automatically identified and included in the preliminary SEFA. 5. Independent SEFA Review: The SEFA will undergo documented independent review and approval by the CFO prior to auditor submission, consistent with 2 CFR 200.303.
Assistance Listing Number, Federal Agency, and Program Name 93.044, 93.045, 93.053, U.S. Department of Health and Human Services, Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers; Special Programs for the Aging, Title III, Part C, Nutrition Services, and Nutrition Services Incentive Program (Aging Cluster) Federal Award Identification Number and Year EX24040 (2024); 21 IHEA 160179 (2021); EX23077 (2023); CON1357567 (2024) Pass through Entity Larimer County and Denver Regional Council of Governments Finding Type Material weakness Repeat Finding No Criteria Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States, or the “Internal Control Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Organization lacked adequate controls to ensure reviews were performed by a different individual than the one responsible for preparing monthly financial reporting, calculations of per unit activity, and requests for reimbursement. Questioned Costs N/A If Questioned Costs are not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could not be Reported No questioned costs were identified as the result of this finding Identification of How Questioned Costs Were Computed N/A Context During our walkthrough to understand management’s processes and internal controls to ensure compliance with financial reporting, we observed that the same individual was responsible for preparing, finalizing, and submitting financial reports for passthrough awards. This process includes accumulating cost activity incurred for the period from the general ledger for the Denver Regional Council of Governments awards, calculating revenue based on a fixed fee per service under the Larimer County awards, and accumulating and reporting matching contributions under all the awards. There was no evidence of an independent review or approval prior to submission. Cause and Effect A lack of segregation of duties and independent review increases the risk of material errors in financial reporting, including misstatements of fee based revenue on the SEFA and inaccuracies in meeting match requirements. Recommendation We recommend the Organization implement a formal control requiring an independent review of all financial reports prior to submission to the funding agency. This review should be performed by an individual who is not involved in the preparation of the reports. Views of Responsible Officials and Planned Corrective Actions Management concurs with the finding. We recognize that for the Denver Regional Council of Governments (DRCOG) and Larimer County awards the processes for accumulating cost activity, calculating per unit revenue, and reporting matching contributions lacked documentation of an independent review prior to submission. While management maintains that the data submitted was accurate and supported by the general ledger, we acknowledge that the absence of a formal "preparer vs. approver" workflow does not meet the standards outlined in 2 CFR 200.303. Corrective Action Plan: 1. Standardization of Financial Reporting Workflow: A formal segregation of duties for all federal and pass through reimbursement requests and financial reports has been implemented. Effective immediately, the individual responsible for accumulating cost data and calculating per unit activity (preparer) is prohibited from being the reviewer. 2. Implementation of Approval Process: All reports must now be submitted by the preparer to the designated reviewer for approval via email prior to submission. An approval response from the reviewer is required prior to submission to the awarding agency. 3. Staff Training: All grants management and accounting personnel have been briefed on the requirements of 2 CFR 200.303, specifically regarding the necessity of documented internal controls to provide reasonable assurance of compliance.
Finding number: 2025-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster AL #: 84.063 and 84.268 Award year: 2025 Criteria The Code of Federal Regulations, consisting of 2 CFR 200.303, 34 CFR 685.309, and 34 CFR 690.83(b)(2), requires that enrollment status changes for students be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Additionally, schools are required to certify enrollment at a minimum of every 60 days or every other month. Condition During our testing of NSLDS Enrollment Reporting for Salem State University, we noted 1 of the 40 students tested had a status change received by NSLDS outside of the 60-day reporting time frame. Cause The University’s Registrar was not made aware of the student’s status change in a timely manner by the student’s academic advisor. As a result, the student’s change in status was delayed in reporting to NSLDS. The University’s policies and procedures were not properly followed to ensure that student status changes were timely reported to NSLDS. Effect The NSLDS system is not updated with the student information which can cause over-awarding should the student transfer to another institution and the student may not properly enter the repayment period. Questioned Costs N/A Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 1 student, or 2.5% of our sample, had a change in status reported outside of the 60-day reporting time frame. Identification as a Repeat Finding, if applicable N/A Recommendation The University should review their reporting procedures to ensure that students’ statuses are timely reported to NSLDS as required by Federal regulations. View of Responsible Officials The University agrees with the finding. This issue was the result of human error, as established procedures were not followed in which a student withdrawal was not forwarded to the Registrar’s Office, preventing timely reporting to NSLDS. The student’s official withdrawal request was not transmitted by the office responsible for approving student leaves and withdrawals to the Registrar’s Office for processing, resulting in the absence of the required enrollment update in the student information system.
Reference Number: 2025-005 Prior Year Finding: 2024-007 Federal Agency: U.S. Department of Agriculture State Agency: Department of Education State Division Name: Child Nutrition Cluster Federal Program: 10.553, 10.555, 10.556, 10.559, 10.582 Assistance Listing Number: 1WV300301 (10/1/2024 – 9/30/2025) Award Number and Year: 1WV310309 (10/1/2024 – 9/30/2026) Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Condition: The Department of Education (Department) did not report subaward information timely. Context: Sixty subawards were selected for testing and we noted the following exceptions: • 36 of 60 subawards were not reported timely. The subawards were reported from approximately 1 to 8 months late. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department does not have sufficient procedures or internal controls to ensure that subaward information is reported timely. Effect: Subawards were not reported in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department review and enhance internal controls and procedures to ensure that all subawards are reported timely, no later than the end of the month following the month of issuance. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-006 Prior Year Finding: 2024-009 Federal Agency: U.S. Department of the Interior State Agency: Department of Environmental Protection Federal Program: Abandoned Mine Land Reclamation Assistance Listing Number: 15.252 Award Number and Year: S19AF20000-05 (1/1/2019 – 12/31/2026) S20AF20008-03 (1/1/2020 – 12/31/2026) S20AF20094-02 (1/1/2021 – 12/31/2026) S22AF00013-02 (1/1/2022 – 12/31/2026) S22AF00039-03 (1/1/2022 – 12/31/2024) S23AF00013-04 (10/1/2022 – 9/30/2027) S23AF00059-00 (1/1/2023 – 12/31/2025) S23AF00107-00 (1/1/2023 – 12/31/2025) S24AF00007-00 (1/1/2024 – 12/31/2026) S24AF00032-01 (1/1/2023 – 9/30/2028) S24AF00064-00 (10/1/2023 – 12/31/2026) S25AF00103-01 (10/1/2024 – 9/30/2029) S25AF00162-00 (1/1/2025 – 12/31/2027 Compliance Requirement: Reporting – Federal Funding Accountability and Transparency Act (FFATA) Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Per the Federal Funding Accountability and Transparency Act (FFATA), prime (direct) recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Reports must be filed in FSRS by the end of the month following the month in which the prime recipient awards any sub-grant greater than or equal to $30,000. If the initial award is below $30,000 but subsequent grant modifications result in a total award equal to or over $30,000, the award will be subject to the reporting requirements as of the date the award exceeds $30,000. If the initial award equals or exceeds $30,000 but funding is subsequently de-obligated such that the total award amount falls below $30,000, the award continues to be subject to FFATA reporting requirements. On March 8, 2025, FSRS.gov was retired, and all subaward reporting data and functionality transitioned to SAM.gov after that date. The following key data elements must be reported: Subawardee Name and Data Universal Numbering System (DUNS) number; Amount of Subaward (inclusive of modifications); Subaward Obligation/Action Date; Date of Report Submission; Subaward Number; Project Description; and Names and Compensation of Highly Compensated Officers. (Names and Compensation of Highly Compensated Officers must only be reported when the entity in the preceding fiscal year received 80 percent or more of its annual gross revenues in Federal awards; and $30,000,000 or more in annual gross revenues from Federal awards; and the public does not have access to this information about the compensation of the senior executives of the entity through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.) Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Environmental Protection did not report subaward information in accordance with FFATA reporting requirements. Context: Two of six subawards selected for testing were not reported timely. Of the two exceptions noted, one subaward was issued in April 2023 and one subaward was issued in July 2024. Both subawards were reported in November 2024. SEE SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR CHART/TABLE Cause: The Department does not have sufficient procedures or internal controls to ensure that subaward information is reported timely. Effect: Subawards were not reported in accordance with FFATA requirements. Questioned costs: None noted. Recommendation: We recommend that the Department review and enhance internal controls and procedures to ensure that all subawards are reported timely no later than the end of the month following the month of issuance. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-007 Prior Year Finding: 2024-015 Federal Agency: U.S. Department of Labor State Agency: Department of Commerce, Workforce West Virginia Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: 25A55UI000073 (10/1/2024 – 12/31/2027) 24A55UI000043 (10/1/2023 – 12/31/2026) 23A55UI039356 (10/1/2022 – 12/31/2025) Compliance Requirement: Special Tests and Provisions: UI Benefit Payments Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or Specific Requirement: Compliance: The State Workforce Agency (SWA) is required by 20 CFR section 602.11(d) to operate and maintain a quality control system. The Benefits Accuracy Measurement (BAM) program is DOL’s quality control system designed to assess the accuracy of UI benefit payments and denied claims, unless the SWA is exempted from such requirement (20 CFR section 602.22). The program estimates error rates, that is, numbers of claims improperly paid or denied, and dollar amounts of benefits improperly paid or denied, by projecting the results from investigations of statistically sound random samples to the universe of all claims paid and denied in a state. Specifically, the SWA’s BAM unit is required to draw a weekly sample of payments and denied claims, complete prompt, and in-depth investigations to determine if the administration of the UC program is consistent with state and federal law (20 CFR section 602.21(d)). As presented in the ET Handbook No. 395, the investigation involves a review of state agency records, as well as contacting the claimant, employers, and third parties (either in-person, by telephone, or by fax) to conduct new and original fact-finding related to all of the information pertinent to the paid or denied claim that was sampled. BAM investigators review cases for adherence to federal and state law as well as official policy. The following time limits are established for completion of all cases for the year. (The "year" includes all batches of weeks ending in the calendar year.): • a minimum of 70% of cases must be completed within 60 days of the week ending date of the batch; • a minimum of 95% of cases must be completed within 90 days of the week ending date of the batch; • a minimum of 98% of cases for the year must be completed within 120 days of the ending date of the calendar year. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department did not complete BAM case investigations within the requirements established in the ET Handbook No. 395. Context: The Department performed 481 reviews of paid cases and 151 reviews of denied cases during FY 2025. The Department did not meet the required time limits for closing paid or denied cases within 60, 90, or 120 days. Specifically, we noted the following exceptions: • 63% of paid cases were closed within 60 days, which is less than the required 70%. • 89% of paid cases were closed within 90 days, which is less than the required 95%. • 92% of paid cases were closed within 120 days, which is less than the required 98%. • The remaining paid cases were closed in more than 120 days. • 96% of denied monetary cases were closed within 120 days, which is less than the required 98%. Questioned costs: Undetermined. Cause: The Department’s procedures and internal controls over BAM case reviews were not sufficient to ensure that case reviews were closed within the time limits required by ET Handbook No. 395. Effect: Noncompliance with the time limits for closing cases could delay the detection and correction of inaccurate benefit payments. Recommendation: We recommend the Department review and enhance procedures and controls to ensure that case reviews are completed timely in accordance with the time limits established in the ET Handbook No. 395. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-008 Prior Year Finding: 2024-013 Federal Agency: U.S. Department of Labor State Agency: Department of Commerce, Workforce West Virginia Federal Program: Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: 25A55UI000073 (10/1/2024 – 12/31/2027) 24A55UI000043 (10/1/2023 – 12/31/2026) 23A55UI039356 (10/1/2022 – 12/31/2025) Compliance Requirement: Special Tests and Provisions: UI Program Integrity – Overpayments Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Compliance: States are (1) required to impose a monetary penalty (not less than 15 percent) on claimants whose fraudulent acts resulted in overpayments, and (2) states are prohibited from providing relief from charges to an employer’s UI account when overpayments are the result of the employer’s failure to respond timely or adequately to a request for information. States may continue to waive recovery of overpayments in certain situations and must continue to offer the individual a fair hearing prior to recovery. In addition, states may approve “blanket waivers” where individuals are eligible for payment under an unemployment benefit program for a given week, but through no fault of the individual, they were paid incorrectly under either the PUA or PEUC program at a higher WBA, or specific to PUA, when, through no fault of the individual, the state paid the individual a minimum WBA based on DUA guidance other than UIPL No. 03-20 (UIPL No. 20-21, section 4.d.ii). Program requirements for overpayments include the State must identify the basis for the overpayment consistent with its written procedures. An overpayment memorandum is created summarizing the details of the overpayment and submitted to UI cross-match staff or claims deputy for review. Upon review, the overpayment is established, and a Deputy Decision or WVUC-B-14-J Overpayment Determination is generated and sent to the claimant. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Commerce (Department) was not in compliance with program requirements for recovering overpayments. Context: For 1 of 60 claimants selected for testing, the Department did not establish an overpayment memo. Questioned costs: Undetermined. Cause: The Department’s procedures and controls are not sufficient to ensure that overpayments are recovered in accordance with program requirements. Effect: Failure to recover overpayments in accordance with federal requirements compromises the integrity and sustainability of the UI program. Unrecovered overpayments reduce funds available to pay legitimate benefits, increase the risk of fraud and improper payments, and undermine compliance with federal program standards. Recommendation: The Department should strengthen its procedures and controls to ensure overpayments are identified, recorded, and recovered in a timely manner and in full compliance with federal requirements. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-009 Prior Year Finding: 2024-035 Federal Agency: U.S. Department of the Treasury State Agency: Office of the Governor Federal Program: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: SLFRP0004 (2021-2024) SLFRP2625 (2021-2024) Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Per the Compliance and Reporting Guidance issued by the Department of the Treasury (Treasury), recipients must submit quarterly Project and Expenditure Reports. Required project information includes current period obligation, cumulative obligation, current period expenditure, and cumulative expenditure. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The West Virginia Office of the Governor (Office) incorrectly reported expenditures for multiple projects on quarterly Project and Expenditure Reports submitted during FY 2025. The Office was also unable to provide documentation supporting obligations reported for one project. Context: Twenty-eight projects were selected for testing Project and Expenditure Reports, consisting of nine projects in the 9/30/2024 quarter and nineteen projects in the 3/31/2025 quarter. The Office contracts with a third-party to compile and submit quarterly Project and Expenditure reports. The contractor relies on the Office to populate the upload worksheets that are submitted to Treasury’s reporting portal. The following exceptions were noted: Expenditures: For 2 of 9 projects selected for testing in the 9/30/2024 quarter, expenditures reported were incorrect. • For the Revenue Replacement project, an expenditure summary analysis prepared by the contractor during the FY 2025 Single Audit identified $3.4 million in expenditures from the 6/30/2023 quarter that were not reported as of 6/30/2025. • For the Revenue Replacement project, reporting errors identified during the FY 2024 Single Audit continued through the 9/30/2024 quarter. Prior quarter cumulative reporting errors in the amount of $375 million were corrected in the 12/31/2024 quarterly report as part of the prior year corrective action plan. • For the Broadband project, an internal review by the contractor during FY 2025 identified that duplicate expenditures had been reported through the 12/31/2024 quarterly report. An adjustment was made in the 3/31/2025 quarter to correct the cumulative expenditures reported in prior quarters. Obligations: For 1 of 9 projects selected for testing in the 9/30/2024 quarter, auditors were unable to verify obligations reported. • The project for the Dilapidated Properties Program contains multiple subawards. The contractor relies on reporting upload worksheets prepared by the Office for submission to the Treasury reporting portal. The Office was unable to provide supporting documentation that agreed with the subaward current and cumulative obligations included on the upload worksheet. Cause: The Office’s corrective action plan from the prior year’s audit was in-process during FY 2025. In addition, internal reviews conducted during FY 2025 and during the audit identified additional reporting errors. Effect: Significant adjustments were required to be made to expenditures reported through the 12/31/2024 quarter, $3.4 million in expenditures from the 6/30/2023 quarter were not reported as of 6/30/2025, and supporting documentation for obligations for the Dilapidated Properties Program was not readily available for audit. Questioned costs: Undetermined. Recommendation: The Office should enhance its procedures and internal controls to ensure that the project expenditures and obligations reported are accurate, allowable, and agree to supporting documentation. In addition, supporting documentation should be readily available for audit. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-019 Prior Year Finding: 2024-052 Federal Agency: National Science Foundation State Agency: Higher Education Policy Commission Federal Program: Research and Development Cluster Assistance Listing Number: 47.076 Award Number and Year: 1834586 (09/01/2018 – 08/31/2025) Compliance Requirement: Suspension and Debarment Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Compliance: 2 CFR 200.214 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. 2 CFR 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM (System for Award Management) Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Higher Education Policy Commission (HEPC) did not properly verify and document the suspension and debarment status of subrecipients. Context: Nine transactions were selected for testing, including five for West Virginia University, one for Shepherd University, two for HEPC, and one for the Department of Agriculture. The following exceptions were noted: HEPC: • For 1 of 2 transactions selected for testing, HEPC performed the suspension and debarment verification after the subaward issuance date. The subaward was issued on 10/31/2023 but the suspension and debarment verification occurred on 12/4/2024. • For 1 of 2 transactions selected for testing, HEPC performed a suspension and debarment verification, but it was not dated and auditors were unable to determine if it occurred prior to issuance of the subaward. Questioned costs: None noted. The subrecipients were not suspended or disbarred. Cause: HEPC’s procedures and internal controls were not sufficient to ensure that it performed suspension and debarment verifications prior to issuance of subawards nor that documentation of the verifications was maintained and was complete. Effect: Failure to verify the suspension and debarment status of subrecipients prior to issuance of subawards could result in HEPC entering into agreements with subrecipients who are ineligible to participate in the program. Recommendation: HEPC should review and enhance its controls and procedures to ensure that it verifies the suspension and debarment status of subrecipients prior to issuance of subawards and include documentation for when the check occurred. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-010 Prior Year Finding: 2024-039 Federal Agency: U.S. Department of Education State Agencies: Glenville State University (GSU), Southern West Virginia Community and Technical College (SWVCTC) Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.063, 84.268 Award Number and Year: Various (7/1/2024-6/30/2025) Compliance Requirement: Cash Management Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or Specific Requirement: Compliance: The Code of Federal Regulations, 34 CFR 685.300(b)(5) requires the College on a monthly basis, to reconcile the institutional records with the Direct Loan funds received from the Secretary and the Direct Loan disbursement records submitted to and accepted by the Secretary. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: GSU - Direct loan reconciliations between the COD, G5 and student accounts were not being performed monthly. SWVCTC - Direct Loan reconciliations among COD, G5, and student accounts were not subjected to monthly review. Context: GSU did not prepare the required monthly direct loan reconciliation between COD, G5, and student accounts for one out of two months selected for testing. SWVCTC was unable to provide documentation supporting the review of monthly reconciliations for two months selected for testing. Questioned costs: None. Cause: GWU - The department did not have sufficient procedures or internal controls in place to ensure appropriate review and sign-off of federal student aid reconciliation amounts. SWVCTC - The process of review was being completed, however, there wasn’t adequate documentation to reflect the review of the reconciliations. Effect: The institutions are not compliant with internal policy and federal requirements to ensure funds are properly reconciled. Recommendation: Management at GSU should implement a monthly Direct Loan reconciliation in accordance with 34 CFR 685.300(b)(5). In addition, documentation over review and approval of the reconciliation for accuracy and completeness should be retained to evidence the operating effectiveness of internal controls. Management at SWVCTC should strengthen its existing internal control to ensure the monthly Direct Loan reconciliation is consistently prepared, reviewed, and approved to evidence the operating effectiveness of internal controls. In addition, documentation over review and approval of the reconciliation for accuracy and completeness should be retained to evidence the operating effectiveness of internal controls. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-012 Prior Year Finding: 2024-047 Federal Agency: U.S. Department of Education State Agencies: West Virginia University (WVU), West Virginia School of Osteopathic Medicine (WVSOM), Southern West Virginia Community and Technical College (SWVCTC) Federal Program: Student Financial Aid Assistance Listing Number: 84.063, 84.268 Award Number and Year: Various (7/1/2024 - 6/30/2025) Compliance Requirement: Special Tests and Provisions: NSLDS Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Compliance: In accordance with 34 CFR 685.309(b) and the National Student Loan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education, schools must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. In addition, schools must report enrollment status changes within 30 days of becoming aware of the status change or in their next scheduled enrollment submission if the schedule submission is within 60 days. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: WVU & WVSOM - There were discrepancies between the program enrollment effective date and the campus enrollment effective date. SWVCTC - There were discrepancies in enrollment reporting. Context: WVU - Ten out of twenty-six samples tested have instances where the program enrollment effective date did not match the campus enrollment effective date reported to NSLDS. WVSOM - Four out of six samples tested have instances where the program enrollment effective date did not match the campus enrollment effective date reported to NSLDS. SWVCTC - One sample tested had multiple discrepancies in enrollment reporting: • The date of the student’s status change was inconsistent between the College’s records and NSLDS. • The student’s enrollment status was not certified within the required 60-day timeframe. • The program enrollment status did not align with the campus enrollment status. • The program enrollment effective date differed from the campus enrollment effective date. Questioned costs: None. Cause: WVU - The department did not have sufficient procedures or internal controls in place to ensure the accuracy and reliability of National Student Clearinghouse (NSC) file generation following the Information Technology Services (ITS) system upgrade. WVSOM - The cause was updated process and a missed parameter in a large spreadsheet submitted to NSLDS upload. SWCTC - Data files weren’t being transmitted from the school to the Clearinghouse to NSLDS correctly. Effect: Inaccurate information is reflected on the NSLDS database. A student’s enrollment data protects the rights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data, ensures loan repayment dates are accurately based on the last data of attendance, allows in-school deferments to be automatically granted using NSLDS enrollment data, and provides vast amounts of critical data about the effectiveness of Title IV aid programs, including completion data. Recommendation: We recommend the institutions review their reporting procedures and controls to ensure that enrollment and program information is accurately reported to NSLDS as required by regulations. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-011 Prior Year Finding: 2024-040 Federal Agency: U.S. Department of Education State Agency: West Virginia State University (WVSU) Federal Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.038, 84.063, 84.268, 84.379 Award Number and Year: Various (7/1/2024-6/30/2025) Compliance Requirement: Special Tests and Provisions: Gramm-Leach-Bliley Act Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or Specific Requirement: Compliance: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Institutions are required to develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts. The regulations require the written information security program to include nine elements for institutions with 5,000 or more customers, (16 CFR 314.3(a)). The elements that an institution must address in its written information security program are at 16 CFR 314.4. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Certain elements of the University’s information security program were not maintained in written form. Context: The University did not have adequate documentation retained to evidence that a review and approval of the information security program were performed during the fiscal year to ensure compliance with Federal regulations. The University’s written information security program did not cover the following requirements: • Assess apps developed by the institution • Implement multi-factor authentication for anyone accessing customer information on the institution’s system • Dispose of customer information securely • Anticipate and evaluate changes to the information system or network. • Maintain a log of authorized users’ activity and keep an eye out for unauthorized access. Provides for the implementation of policies and procedures to ensure that personnel are able to enact the information security program (16 CFR 314.4(e)(1)). Questioned costs: None. Cause: WVSU did not have sufficient procedures or internal controls in place to ensure the timely development, completion, and approval of a formal cybersecurity policy. Effect: Information security management may not be optimized and responses delayed without the written plan. Recommendation: We recommend the University ensure its written information security program addresses the required minimum elements as outlined in 16 CFR 314.4. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-020 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Agriculture Federal Program: Research and Development Cluster Assistance Listing Number: 93.103 Award Number and Year: Various Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR 200.313 prescribes the requirements for non-federal entities regarding equipment and real property management. Requirements include the following: Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Agriculture did not manage equipment purchased with federal program funds in accordance with federal requirements. Context: Sixty items were selected for testing which included three from the Department of Agriculture (Department), five from Bluefield State College (BSC), and fifty-two from West Virginia University. We noted the following exceptions: Department of Agriculture: For one of three property records selected for testing, the Department did not maintain property records. Cause: The Department does not have sufficient procedures or internal controls to ensure that equipment and property acquired with federal funds is maintained in accordance with federal requirements. Effect: Failure to adequately manage federal equipment and property could allow for undetected loss, theft, damage, or unauthorized use of the property. Questioned costs: Undetermined. Recommendation: We recommend that the Department review and enhance internal controls and procedures to ensure that equipment and property acquired using federal funds is managed in accordance with federal requirements. The Department should maintain property records and perform a physical inventory for all equipment. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-021 Prior Year Finding: 2024-054 Federal Agency: Department of Health and Human Services State Agency: Department of Agriculture Federal Program: Research and Development Cluster Assistance Listing Number: 93.103 Award Number and Year: 5U2FFD007445-04 (7/01/2024 – 06/30/2026) Compliance Requirement: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance – Per 2 CFR section 200.332(a), all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Agriculture did not include all required information in subaward agreements. Context: One of eight subawards selected for testing were missing required federal award information. The eight subawards tested consisted of six subawards from West Virginia University (WVU), one subaward from the Department of Agriculture (Department) and one subaward from the Higher Education Policy Commission (HEPC). The following exceptions were noted: Department of Agriculture: The subaward tested did not contain all required federal award information. The Assistance Listing Number and identification of whether the Federal award was for research and development was omitted from the subaward agreement. Questioned costs: None noted. Cause: The Department does not have sufficient procedures and internal controls to ensure that subawards are issued in compliance with Federal requirements. Effect: Excluding the required federal grant award information at the time of the subaward may cause subrecipients and their auditors to be uninformed about specific program and other regulations that apply to the funds they receive. There is also the potential for subrecipients to have incomplete Schedules of Expenditures of Federal Awards (SEFA) in their Single Audit reports, and federal funds may not be properly audited at the subrecipient level in accordance with the Uniform Guidance. Recommendation: The Department should review and enhance internal controls and procedures to ensure that all required information is included in subaward agreements. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-022 Prior Year Finding: 2024-021 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Temporary Assistance for Needy Families Assistance Listing Number: 93.558 Award Number and Year: 2401WVTANF (10/1/2023 – 9/30/2024) 2503WVTANF (10/1/2024 – 9/30/2025) Compliance Requirement: Special Tests and Provisions - Income Eligibility and Verification System Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance Criteria or Specific Requirement: Compliance: Each state shall participate in the Income Eligibility and Verification System (IEVS) required by Section 1137 of the Act as amended. Under the state plan the state is required to coordinate data exchanges with other federally assisted benefit programs, request and use income and benefit information when making eligibility determinations and adhere to standardized formats and procedures in exchanging information with other programs and agencies. Specifically, the state is required to request and obtain information as follows: (a) Wage information from the state Wage Information Collection Agency should be obtained for all applicants at the first opportunity following receipt of the application, and for all recipients on a quarterly basis. (b) Unemployment Compensation (UC) information should be obtained for all applicants at the first opportunity, and in each of the first three months in which the individual is receiving aid. This information should also be obtained in each of the first three months following any recipient-reported loss of employment. If an individual is found to be receiving UC, the information should be requested until benefits are exhausted. (c) All available information from the Social Security Administration (SSA) for all applicants at the first opportunity. (d) Information from the US Citizenship and Immigration Services and any other information from other agencies in the state or in other states that might provide income or other useful information. (e) Unearned income from the Internal Revenue Service (IRS). Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not perform data exchange matches on cases or did not perform the data matches prior to disbursement of benefits. Context: Sixty cases were selected for testing, and the following exceptions were noted: • 10 of 60 cases did not perform a data match with other federally assisted benefit programs as required by the program. Benefits selected for testing were disbursed on 5/1/2025 and 6/1/2025 but the Department was unable to provide documentation that a data match had been performed. • 4 of 60 cases did not perform a data match with other federally assisted benefit programs prior to disbursement of benefits to the participants. The match check was performed from twelve to twenty-four days after benefits were disbursed. Cause: The Department’s procedures and internal controls were not sufficient to ensure that it complied with IEVS data match requirements prior to issuance of benefits to participants in the program. The Department had not fully implemented its corrective action plan from the prior audit year. Effect: Failure to perform data exchanges with other federally assisted benefit programs could allow ineligible participants to receive benefits under the program. Questioned costs: Undetermined. Based upon information available at the time of audit, auditors were unable to determine if benefits were paid to ineligible participants. Recommendation: We recommend the Department complete implementation of its corrective action plan from theprior audit year. The Department should reevaluate its current process, implement proper controls, and perform additional training to ensure that, prior to disbursing benefits to participants, it has performed a data match with other federally assisted benefit programs and ensure that only eligible participants receive benefits under the program. Supporting documentation should be maintained and be readily available for audit. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-013 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Low-Income Home Energy Assistance Assistance Listing Number: 93.568 Award Number and Year: 2401WVLIEA (10/1/2023 – 9/30/2025) Compliance Requirement: Reporting – Special Reporting – LIHEAP Carryover and Reallotment Report Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Grant recipients must submit an initial LIHEAP Carryover and Reallotment Report no later than August 1 and a final report by December 31 indicating the amount expected to be carried forward for obligation in the following fiscal year and the planned use of those funds. Funds more than the maximum carryover limit are subject to reallotment to other LIHEAP recipients in the following federal fiscal year and must also be reported. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) did not submit the final LIHEAP Carryover and Reallotment Report timely. Context: The final Carryover and Reallotment Report for FFY 2024 was due 12/31/2024 but was not filed by the Department until 1/21/2025, or 21 days late. Cause: The Department controls failed to ensure that the final LIHEAP Carryover and Reallotment Report was submitted timely. Effect: Failure to submit the LIHEAP Carryover and Reallotment Report timely could impact the Federal agency’s ability to manage the program. Questioned costs: None noted. Recommendation: We recommend that the Department review and enhance internal controls and procedures to ensure that the final LIHEAP Carryover and Reallotment Report is submitted by December 31 each year. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-015 Prior Year Finding: 2024-025 Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Foster Care – Title IV-E Assistance Listing Number: 93.658 Award Number and Year: 2502WVFOST (10/1/2024 – 9/30/2025) 2401WVFOST (1/1/2024 – 3/31/2025) Compliance Requirement: Allowable Costs/Cost Principles, Eligibility Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: Allowable Costs/Cost Principles – Per 2 CFR section 200.403, except where otherwise authorized by statute, costs must meet certain criteria to be allowable under Federal awards. Criteria includes that costs must be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. Costs must also conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. Eligibility – Funds may be expended for foster care maintenance payments on behalf of eligible children, in accordance with the Title IV-E agency’s foster care maintenance payment rate schedule and in accordance with 45 CFR section 1356.21, to individuals serving as foster family homes, to child-care institutions, directly to a youth aged 18 or older who is in a supervised independent living setting if no actual provider or other child placing intermediary is involved, or public or private child-placement or child-care agencies. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) charged the Foster Care program for payments made to psychiatric facilities which is an unallowable cost under the program. Context: One of sixty cases selected for testing included payments to a psychiatric facility. Payments to psychiatric facilities are not allowable under the Foster Care program. Cause: The Department’s corrective action plan from the prior audit indicated that a system change was made during FY 2025 to prevent future payments to psychiatric facilities from being charged to the Foster Care program. The exception noted was prior to the implementation of the correction action plan. Effect: Ineligible expenditures were charged to the Foster Care program. Questioned costs: $665, the amount paid to the psychiatric facility for the case tested. Recommendation: The Department should ensure its corrective action plan from the prior audit has been fully implemented and ensure that payments to psychiatric facilities are no longer charged to the Foster Care program. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-016 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Foster Care – Title IV-E Assistance Listing Number: 93.658 Award Number and Year: 2502WVFOST (10/1/2024 – 9/30/2025) 2401WVFOST (1/1/2024 – 3/31/2025) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.403 states, in part, 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. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) was unable to provide supporting documentation for costs charged to the program. Context: For two of sixty cases selected for testing, the Department was unable to provide supporting documentation for the transactions. Auditors were unable to verify that the expenditures were allowable nor that they had been reviewed and approved prior to issuance. Cause: While the Department has established procedures in place, a clerical error resulted in supporting documentation not being properly maintained for certain program expenditures. Although the Department's multi-layered review process identified the missing documentation before the automated financial system issued payment, the error was not corrected prior to issuance. Consequently, internal controls did not prevent these errors. Effect: Expenditures without supporting documentation were charged to the Foster Care program. Questioned costs: $50, the amount charged to the program without supporting documentation. Recommendation: The Department should reevaluate its current process, implement proper controls, and perform additional training to ensure that, prior to charging costs to the program, it has supporting documentation which is reviewed and approved by a supervisor who is knowledgeable of the regulations regarding allowable program costs. Supporting documentation should be maintained and be readily available for audit. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-017 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Adoption Assistance Assistance Listing Number: 93.659 Award Number and Year: 2502WVADPT (10/1/2024 – 9/30/2025) 2502WVADPT (1/1/2024 – 3/31/2025) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR section 200.403 states, in part, 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. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) was unable to provide supporting documentation for costs charged to the program. Context: For one of sixty cases selected for testing, the Department was unable to provide supporting documentation for the transaction. Auditors were unable to verify that the expenditure was allowable nor that it had been reviewed and approved prior to issuance. Cause: While the Department has established procedures in place, a clerical error resulted in supporting documentation not being properly maintained for certain program expenditures. Although the Department's multi-layered review process identified the missing documentation before the automated financial system issued payment, the error was not corrected prior to issuance. Consequently, internal controls did not prevent these errors. Effect: An expenditure without supporting documentation was charged to the Adoption Assistance program. Questioned costs: $26, the amount charged to the program without supporting documentation. Recommendation: The Department should reevaluate its current process, implement proper controls, and perform additional training to ensure that, prior to charging costs to the program, it has supporting documentation which is reviewed and approved by a supervisor who is knowledgeable of the regulations regarding allowable program costs. Supporting documentation should be maintained and be readily available for audit. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-018 Prior Year Finding: No Federal Agency: Various State Agency: Higher Education Policy Commission (HEPC) Bluefield State University Federal Program: Research and Development Cluster Assistance Listing Number: Various Award Number and Year: Various Compliance Requirement: Procurement Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 2 CFR 200.320 (a)(1)(iv) states that a recipient or subrecipient may establish a micro-purchase threshold higher than the micro-purchase threshold identified in the FAR in accordance with the requirements of this section. The recipient or subrecipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the Federal agency or pass-through entity and auditors in accordance with § 200.334. The self-certification must include a justification, clear identification of the threshold, and supporting documentation of any of the following: A. A qualification as a low-risk auditee, in accordance with the criteria in § 200.520 for the most recent audit; B. An annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or, C. For public institutions, a higher threshold is consistent with State law. Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: HEPC and Bluefield State University utilized micro‑purchase procedures for purchases charged to Federal awards at amounts exceeding the Federal micro‑purchase threshold based on thresholds established in its Board approved policies. However, the entities did not complete and retain the required annual self‑certification supporting the higher thresholds utilized. Context: HEPC applied a micro‑purchase threshold of $50,000 and Bluefield State University applied a micro‑purchase threshold of $25,000. Questioned costs: None noted. Cause: HEPC’s and Bluefield State University’s internal control processes did not include a documented control activity to ensure annual self‑certification of the micro‑purchase threshold was completed, approved by appropriate authority, and retained in accordance with Uniform Guidance requirements. Effect: By applying micro‑purchase procedures to transactions exceeding the Federal micro‑purchase threshold without maintaining required self‑certification documentation, the entities increase the risk of noncompliance with Uniform Guidance procurement standards, insufficient competition or price reasonableness documentation, and the potential for unallowable or unsupported costs charged to Federal awards. Recommendation: HEPC and Bluefield State University should formally establish and document an annual self‑certification of their micro‑purchase thresholds in accordance with 2 CFR §200.320(a)(1)(iv). The self‑certification should clearly identify the approved threshold, include a written justification, and retain supporting documentation demonstrating compliance with one of the allowable criteria. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.
Reference Number: 2025-004 Prior Year Finding: No Federal Agency: U.S. Department of the Treasury, U.S. Department of Agriculture, U.S. Department of Labor, U.S. Department of Education, U.S. Department of Health and Human Services, U.S. Department of Homeland Security State Agency: State Treasurer’s Office Federal Program: SNAP Cluster National School Lunch Program Unemployment Insurance Title I Grants to Local Educational Agencies Special Education -- Grants to States Education Stabilization Fund Temporary Assistance for Needy Families Low-Income Home Energy Assistance Child Care and Development Block Grant Foster Care -- Title IV-E Adoption Assistance Children's Health Insurance Program Medical Assistance Program Disaster Grants - Public Assistance (Presidentially Declared Disasters) Assistance Listing Number: 10.551, 10.561, 10.555, 17.225, 84.010, 84.027, 84.425, 93.558, 93.568, 93.575, 93.658, 93.659, 93.767, 93.778, 97.036 Award Number and Year: Various Compliance Requirement: Reporting - Cash Management Improvement Act Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Compliance: 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 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. Annual Reports are submitted electronically by December 31 of each year. The Annual Report includes Federal interest liabilities, State interest liabilities, and State direct cost claims. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The State Treasurer’s Office (Department) did not submit the FY 2025 Annual Report timely. Context: Treasury granted the Department an extension until January 9, 2026 to submit the FY 2025 Annual Report. The Department did not submit the report until January 14, 2026. Cause: Due to extenuating circumstances, the Department requested an extension beyond the regulatory filing deadline but did not seek an additional extension when the issues remained unresolved. Effect: Untimely submission of the Annual Report may delay Treasury’s settlement of applicable annual interest payments. Questioned costs: None noted. Recommendation: The Department should enhance its procedures and internal controls to ensure that the Annual Report is submitted timely in accordance with CMIA requirements and the terms of deadline extension, if applicable. Views of responsible officials: Management concurs with the finding and has developed a plan to correct the finding.