Finding 2024-001 – N. Special Tests and Provisions – Enrollment Reporting – Status Change – Campus Level Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033 84.063, 84.268) Criteria or Specific Requirement – Institutions are required to report enrollment information under the Pell grant and the Direct and Federal Family Education Loan (“FFEL”) loan programs via the National Student Loan Data System (“NSLDS”) (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify 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 which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for accurately and timely reporting certain significant data elements under the Campus-Level Record that the U.S. Department of Education considers high risk, including enrollment status, which is the student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). At a minimum, institutions are required to certify enrollment every 60 days or every other month. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – The University did not submit timely notification to the NSLDS website for certain students selected for testing. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University is not in compliance with campus level enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs – None. Context – For 15 of 40 students selected for testing, the University did not submit a timely notification to the NSLDS website. Indication of Repeat Finding - This is a repeat of prior year finding 2023-002. Recommendation – We recommend that the University enhance its procedures and internal controls over the applicable compliance requirements of the enrollment reporting requirement to ensure that all status changes are submitted to the NSLDS website within the required timeframe. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal enrollment reporting requirements. The following steps will be undertaken: 1. Establish an Internal Audit Function: The University is actively seeking to fill a newly approved internal auditor position, with a dedicated budget line item to support this function. This role will provide leadership on all corrective action plans and serve as the primary contact for audit-related matters, ensuring onsite management for compliance issues within the University and its affiliated agencies. 2. Engage External Expertise: The Office of the Registrar will engage with the internal auditor and the National Student Loan Clearinghouse to review critical processes. This ongoing collaboration aims to assess the department’s strengths, weaknesses, opportunities, and threats, facilitating continuous improvement and compliance. 3. Enhance Staffing and Technological Resources: The University has made necessary staffing changes and will continue to evaluate the efficiency of the enrollment reporting process. This includes hiring additional staff as needed and incorporating advanced technology solutions to address this recurring issue. The implementation of enhanced technology will assist the Registrar in receiving alerts and status reports, ensuring timely and accurate processing. 4. Implement Robust Monitoring Systems: The University aims to generate necessary information and update systems to improve its capability to monitor student enrollment statuses, thereby enhancing compliance. This initiative will address challenges associated with certifying these enrollment status changes in a timely manner. 5. Strengthen Reporting Processes: Given the recurrence of this finding, the University will implement an enhanced reporting process, requiring the filing of transfer student status reports on a semester basis until the issue is resolved. The internal audit team will lead this reporting cycle, ensuring accountability and compliance. The internal audit unit will oversee and manage these corrective actions until the matter is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with enrollment reporting requirements. By implementing these measures, the University aims to rectify the identified deficiencies and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal regulations.
Finding 2024-003 – N. Special Tests and Provisions – Return of Title IV Funds Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033, 84.063, 84.268 and 84.379) Criteria or Specific Requirement – Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to U.S. Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – A return of Title IV funds for a student was not completed within the required time frames. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – A return of Title IV funds was not completed within the required time frames resulting in the University not being in compliance with return of Title IV funds requirements. Questioned Costs – None. Context – For 1 of 3 students selected for return of Title IV funds testing. Indication of Repeat Finding - No similar finding noted in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls related to the return of Title IV funds within the required time frames. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal regulations regarding the Return of Title IV Funds (R2T4). The following steps will be undertaken: 1. Establish an Internal Audit Function: The University has requested a position from the State of South Carolina Human Resources Office to create an internal auditor role. A dedicated budget line item is being developed to support this function, which will oversee all corrective action plans and serve as the primary contact for audit-related matters, providing onsite management for compliance issues within the University and its affiliated agencies. 2. Enhance Communication Between Departments: The Financial Aid team will strengthen coordination with the Registrar’s Office to ensure timely identification of student withdrawals. This collaboration is essential to initiate the process promptly and adhere to the required deadlines. 3. Implement Technological Solutions: The University will engage technical support to develop alert systems that notify relevant departments of impending compliance deadlines and requirements related to Title IV funds. This proactive approach will facilitate timely actions and reduce the risk of non-compliance. The internal audit team will oversee and manage these corrective actions until the issue is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with federal regulations governing the return of Title IV funds. By implementing these measures, the University aims to rectify the identified deficiency and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal requirements.
Finding 2024-002 – N. Special Tests and Provisions – Federal Perkins Loan Program Recordkeeping and Record Retention Information on Federal Program(s) – Student Financial Assistance Cluster (ALN 84.038) Criteria or Specific Requirement – Institutions are required to keep original paper promissory notes or original paper master promissory notes and repayment schedules in a locked, fireproof container. The original promissory notes and repayment schedules must be kept until the loans are satisfied. If required to release original documents in order to enforce the loan, the institution must retain certified true copies of those documents. After the loan obligation is satisfied, the institution shall return the original or a true and exact copy of the note marked "paid in full" to the borrower, or otherwise notify the borrower in writing that the loan is paid in full and retain a copy for the prescribed period. An institution shall retain repayment records, including cancellation and deferment requests for at least three years from the date on which a loan is assigned to the secretary, canceled, or repaid. An institution shall retain disbursement and electronic authentication and signature records for each loan made using a master promissory note for at least three years from the date the loan is canceled, repaid, or otherwise satisfied. When an institution uses a third-party servicer for its Perkins Loan program, the institution must perform due diligence to ensure that the third-party servicer is in compliance with the requirements for the functions the third-party servicer is performing for the institution. Such due diligence could include obtaining and reviewing the third party servicer’s most recent Title IV compliance audit. When an institution uses a third-party servicer for its Federal Perkins Loan Program, the institution must perform due diligence to ensure that the third party servicer is in compliance with the requirements for the functions the third party servicer is performing for the school. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – Certain Federal Perkins Loan Program records selected for testing were missing a signed master promissory note, missing repayment schedules, missing documentation for the first disbursement, missing documentation for the last payment, or missing other documentation. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University was not in compliance with the Federal Perkins Loan Program recordkeeping and record retention requirements. Questioned Costs – None. Context – For 1 of 40 Federal Perkins Loan Program records selected for testing, we noted that 1 record was missing a signed master promissory note and a repayment schedule. Indication of Repeat Finding - This is a repeat of prior year finding 2023-005. Recommendation – We recommend that the University enhance its procedures and internal controls related to Federal Perkins Loan Program recordkeeping and record retention. Views of Responsible Officials – The University acknowledges this finding and during its liquidation of the Federal Perkins Loan Program completed the buyback of certain loans for which the University was not able to provide adequate documentation to assign these loans to the Department of Education. Subsequent to June 30, 2024, the University has completed the following steps in the closeout of its Federal Perkins Loan Program: 1. Notified the Department of Education of the intent to liquidate. 2. Assigned outstanding Perkins loans to the Department of Education and updated NSLDS throughout the assignment process. 3. Purchased loans not qualifying for assignment and submitted cash on hand (Intent and Closeout Form Phase 3 in COD) 4. Remitted the federal share to the Department 5. Submitted final FISAP data (Intent to Closeout Form Phase 4 in COD) The final remaining step for the University to complete closeout of its Federal Perkins Loan Program is to submit a Perkins closeout audit to the Department. This will be submitted as part of the Single Audit for the year ended June 30, 2025, which is due March 31, 2026.
Finding 2024-001 – N. Special Tests and Provisions – Enrollment Reporting – Status Change – Campus Level Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033 84.063, 84.268) Criteria or Specific Requirement – Institutions are required to report enrollment information under the Pell grant and the Direct and Federal Family Education Loan (“FFEL”) loan programs via the National Student Loan Data System (“NSLDS”) (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify 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 which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for accurately and timely reporting certain significant data elements under the Campus-Level Record that the U.S. Department of Education considers high risk, including enrollment status, which is the student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). At a minimum, institutions are required to certify enrollment every 60 days or every other month. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – The University did not submit timely notification to the NSLDS website for certain students selected for testing. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University is not in compliance with campus level enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs – None. Context – For 15 of 40 students selected for testing, the University did not submit a timely notification to the NSLDS website. Indication of Repeat Finding - This is a repeat of prior year finding 2023-002. Recommendation – We recommend that the University enhance its procedures and internal controls over the applicable compliance requirements of the enrollment reporting requirement to ensure that all status changes are submitted to the NSLDS website within the required timeframe. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal enrollment reporting requirements. The following steps will be undertaken: 1. Establish an Internal Audit Function: The University is actively seeking to fill a newly approved internal auditor position, with a dedicated budget line item to support this function. This role will provide leadership on all corrective action plans and serve as the primary contact for audit-related matters, ensuring onsite management for compliance issues within the University and its affiliated agencies. 2. Engage External Expertise: The Office of the Registrar will engage with the internal auditor and the National Student Loan Clearinghouse to review critical processes. This ongoing collaboration aims to assess the department’s strengths, weaknesses, opportunities, and threats, facilitating continuous improvement and compliance. 3. Enhance Staffing and Technological Resources: The University has made necessary staffing changes and will continue to evaluate the efficiency of the enrollment reporting process. This includes hiring additional staff as needed and incorporating advanced technology solutions to address this recurring issue. The implementation of enhanced technology will assist the Registrar in receiving alerts and status reports, ensuring timely and accurate processing. 4. Implement Robust Monitoring Systems: The University aims to generate necessary information and update systems to improve its capability to monitor student enrollment statuses, thereby enhancing compliance. This initiative will address challenges associated with certifying these enrollment status changes in a timely manner. 5. Strengthen Reporting Processes: Given the recurrence of this finding, the University will implement an enhanced reporting process, requiring the filing of transfer student status reports on a semester basis until the issue is resolved. The internal audit team will lead this reporting cycle, ensuring accountability and compliance. The internal audit unit will oversee and manage these corrective actions until the matter is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with enrollment reporting requirements. By implementing these measures, the University aims to rectify the identified deficiencies and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal regulations.
Finding 2024-003 – N. Special Tests and Provisions – Return of Title IV Funds Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033, 84.063, 84.268 and 84.379) Criteria or Specific Requirement – Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to U.S. Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – A return of Title IV funds for a student was not completed within the required time frames. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – A return of Title IV funds was not completed within the required time frames resulting in the University not being in compliance with return of Title IV funds requirements. Questioned Costs – None. Context – For 1 of 3 students selected for return of Title IV funds testing. Indication of Repeat Finding - No similar finding noted in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls related to the return of Title IV funds within the required time frames. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal regulations regarding the Return of Title IV Funds (R2T4). The following steps will be undertaken: 1. Establish an Internal Audit Function: The University has requested a position from the State of South Carolina Human Resources Office to create an internal auditor role. A dedicated budget line item is being developed to support this function, which will oversee all corrective action plans and serve as the primary contact for audit-related matters, providing onsite management for compliance issues within the University and its affiliated agencies. 2. Enhance Communication Between Departments: The Financial Aid team will strengthen coordination with the Registrar’s Office to ensure timely identification of student withdrawals. This collaboration is essential to initiate the process promptly and adhere to the required deadlines. 3. Implement Technological Solutions: The University will engage technical support to develop alert systems that notify relevant departments of impending compliance deadlines and requirements related to Title IV funds. This proactive approach will facilitate timely actions and reduce the risk of non-compliance. The internal audit team will oversee and manage these corrective actions until the issue is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with federal regulations governing the return of Title IV funds. By implementing these measures, the University aims to rectify the identified deficiency and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal requirements.
Finding 2024-001 – N. Special Tests and Provisions – Enrollment Reporting – Status Change – Campus Level Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033 84.063, 84.268) Criteria or Specific Requirement – Institutions are required to report enrollment information under the Pell grant and the Direct and Federal Family Education Loan (“FFEL”) loan programs via the National Student Loan Data System (“NSLDS”) (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify 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 which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Institutions are responsible for accurately and timely reporting certain significant data elements under the Campus-Level Record that the U.S. Department of Education considers high risk, including enrollment status, which is the student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). At a minimum, institutions are required to certify enrollment every 60 days or every other month. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – The University did not submit timely notification to the NSLDS website for certain students selected for testing. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University is not in compliance with campus level enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs – None. Context – For 15 of 40 students selected for testing, the University did not submit a timely notification to the NSLDS website. Indication of Repeat Finding - This is a repeat of prior year finding 2023-002. Recommendation – We recommend that the University enhance its procedures and internal controls over the applicable compliance requirements of the enrollment reporting requirement to ensure that all status changes are submitted to the NSLDS website within the required timeframe. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal enrollment reporting requirements. The following steps will be undertaken: 1. Establish an Internal Audit Function: The University is actively seeking to fill a newly approved internal auditor position, with a dedicated budget line item to support this function. This role will provide leadership on all corrective action plans and serve as the primary contact for audit-related matters, ensuring onsite management for compliance issues within the University and its affiliated agencies. 2. Engage External Expertise: The Office of the Registrar will engage with the internal auditor and the National Student Loan Clearinghouse to review critical processes. This ongoing collaboration aims to assess the department’s strengths, weaknesses, opportunities, and threats, facilitating continuous improvement and compliance. 3. Enhance Staffing and Technological Resources: The University has made necessary staffing changes and will continue to evaluate the efficiency of the enrollment reporting process. This includes hiring additional staff as needed and incorporating advanced technology solutions to address this recurring issue. The implementation of enhanced technology will assist the Registrar in receiving alerts and status reports, ensuring timely and accurate processing. 4. Implement Robust Monitoring Systems: The University aims to generate necessary information and update systems to improve its capability to monitor student enrollment statuses, thereby enhancing compliance. This initiative will address challenges associated with certifying these enrollment status changes in a timely manner. 5. Strengthen Reporting Processes: Given the recurrence of this finding, the University will implement an enhanced reporting process, requiring the filing of transfer student status reports on a semester basis until the issue is resolved. The internal audit team will lead this reporting cycle, ensuring accountability and compliance. The internal audit unit will oversee and manage these corrective actions until the matter is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with enrollment reporting requirements. By implementing these measures, the University aims to rectify the identified deficiencies and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal regulations.
Finding 2024-003 – N. Special Tests and Provisions – Return of Title IV Funds Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033, 84.063, 84.268 and 84.379) Criteria or Specific Requirement – Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to U.S. Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – A return of Title IV funds for a student was not completed within the required time frames. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – A return of Title IV funds was not completed within the required time frames resulting in the University not being in compliance with return of Title IV funds requirements. Questioned Costs – None. Context – For 1 of 3 students selected for return of Title IV funds testing. Indication of Repeat Finding - No similar finding noted in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls related to the return of Title IV funds within the required time frames. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal regulations regarding the Return of Title IV Funds (R2T4). The following steps will be undertaken: 1. Establish an Internal Audit Function: The University has requested a position from the State of South Carolina Human Resources Office to create an internal auditor role. A dedicated budget line item is being developed to support this function, which will oversee all corrective action plans and serve as the primary contact for audit-related matters, providing onsite management for compliance issues within the University and its affiliated agencies. 2. Enhance Communication Between Departments: The Financial Aid team will strengthen coordination with the Registrar’s Office to ensure timely identification of student withdrawals. This collaboration is essential to initiate the process promptly and adhere to the required deadlines. 3. Implement Technological Solutions: The University will engage technical support to develop alert systems that notify relevant departments of impending compliance deadlines and requirements related to Title IV funds. This proactive approach will facilitate timely actions and reduce the risk of non-compliance. The internal audit team will oversee and manage these corrective actions until the issue is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with federal regulations governing the return of Title IV funds. By implementing these measures, the University aims to rectify the identified deficiency and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal requirements.
Finding 2024-004 – E. Eligibility – Over award of Title IV Funds Information on Federal Program(s) – Student Financial Assistance Cluster (ALN 84.268) Criteria or Specific Requirement – Student financial assistance awards must be coordinated among the various programs and with other federal and nonfederal aid (need and non-need based aid) to ensure that total aid is not awarded in excess of the student’s financial need or cost of attendance (34 CFR 668.42, FWS, and FSEOG, 34 CFR 673.5 and 673.6; Direct Loan, 34 CFR 685.301). Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – A student was awarded total aid in excess of the student’s cost of attendance. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – A student received total aid in excess of the student’s cost of attendance resulting in the University not being in compliance with eligibility requirements. Questioned Costs – Known questioned costs were $2,742 which were specific to 1 of 25 student selected for eligibility testing who received total aid in excess of the student’s cost of attendance. Context – For 1 of 25 students selected for eligibility testing. Indication of Repeat Finding - No similar finding noted in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls related to award of student financial assistance awards to prevent total aid from being award in excess of the student’s cost of attendance. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal financial aid regulations. The following steps will be undertaken: 1. Strengthen Financial Aid Coordination: The Financial Aid team will enhance coordination among various programs and between federal and non-federal aid sources to ensure that total aid awarded does not exceed a student’s financial need or cost of attendance. This aligns with federal regulations requiring institutions to prevent over awards by adjusting aid packages accordingly. 2. Implement Advanced Technological Solutions: The University will collaborate with technology support teams to develop data platforms and scripts that monitor and control award amounts, ensuring they do not surpass students’ cost of attendance. This proactive approach will aid in preventing future over award situations. The internal audit team will oversee and manage these corrective actions until the issue is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with federal financial aid regulations and to uphold the integrity of its financial aid programs. By implementing these measures, the University aims to rectify the identified over award issue and prevent similar occurrences in the future, thereby maintaining compliance with Title IV funding requirements.
Finding 2024-005 – L. Reporting – Financial Reporting Information on Federal Program(s) – Student Financial Assistance Cluster (ALN 84.268) Criteria or Specific Requirement – Institutions submit Federal Direct Student Loans, Federal Pell Grant Program, Teacher Education Assistance for College and Higher Education Grants, and Iraq and Afghanistan Service Grant origination records and disbursement records to the Common Origination and Disbursement (“COD”) system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method (see Federal Register, Volume 86, Number 119, June 24, 2021). The disbursement record reports the actual disbursement date and the amount of the disbursement. U.S. Department of Education processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. In testing the origination and disbursement data, the auditor should be most concerned with the data U.S. Department of Education has categorized as accepted or accepted with corrections. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – For a disbursement of Federal Direct Student Loans program funds, the University did not submit the origination and disbursement records to the COD system within the required timeframes. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University did not submit the origination and disbursement records to the COD system within the required timeframes resulting in the University not being in compliance with the financial reporting requirements. Questioned Costs – None. Context – For 1 of 25 students selected for COD reporting testing. Indication of Repeat Finding - No similar finding noted in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls related to the submission of origination and disbursement records to the COD system. Views of Responsible Officials – The University acknowledges this finding and is committed to immediate corrective measures to ensure compliance with federal regulations. The following actions will be undertaken: 1. Enhance Procedures and Internal Controls: The University will strengthen its procedures and internal controls related to the submission of origination and disbursement records to the COD system. This includes implementing stricter monitoring mechanisms to ensure all records are submitted within the required timeframes. 2. Implement Advanced Technology Solutions: To improve the efficiency and accuracy of financial reporting, the University will adopt advanced technology solutions. These tools will facilitate timely and accurate submission of required data to the COD system. The newly established internal audit team will oversee the implementation and management of these corrective actions until the issue is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with federal origination and disbursement requirements. By taking these steps, the University aims to rectify the identified deficiency and prevent future occurrences, thereby maintaining the integrity of its financial reporting processes.
Finding 2024-003 – N. Special Tests and Provisions – Return of Title IV Funds Information on Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033, 84.063, 84.268 and 84.379) Criteria or Specific Requirement – Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to U.S. Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Additionally, the Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – A return of Title IV funds for a student was not completed within the required time frames. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – A return of Title IV funds was not completed within the required time frames resulting in the University not being in compliance with return of Title IV funds requirements. Questioned Costs – None. Context – For 1 of 3 students selected for return of Title IV funds testing. Indication of Repeat Finding - No similar finding noted in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls related to the return of Title IV funds within the required time frames. Views of Responsible Officials – The University acknowledges this finding and is committed to implementing immediate measures to ensure compliance with federal regulations regarding the Return of Title IV Funds (R2T4). The following steps will be undertaken: 1. Establish an Internal Audit Function: The University has requested a position from the State of South Carolina Human Resources Office to create an internal auditor role. A dedicated budget line item is being developed to support this function, which will oversee all corrective action plans and serve as the primary contact for audit-related matters, providing onsite management for compliance issues within the University and its affiliated agencies. 2. Enhance Communication Between Departments: The Financial Aid team will strengthen coordination with the Registrar’s Office to ensure timely identification of student withdrawals. This collaboration is essential to initiate the process promptly and adhere to the required deadlines. 3. Implement Technological Solutions: The University will engage technical support to develop alert systems that notify relevant departments of impending compliance deadlines and requirements related to Title IV funds. This proactive approach will facilitate timely actions and reduce the risk of non-compliance. The internal audit team will oversee and manage these corrective actions until the issue is fully resolved. The University is dedicated to enhancing its procedures and internal controls to ensure full compliance with federal regulations governing the return of Title IV funds. By implementing these measures, the University aims to rectify the identified deficiency and prevent similar occurrences in the future, thereby upholding the integrity of its financial aid programs and maintaining compliance with federal requirements.
Assistance Listings number and name: 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award number and year: SLFRP0665, March 3, 2021 through December 31, 2026 Federal agency: U.S. Department of the Treasury Compliance requirement: Suspension and debarment Questioned costs: None Condition—Contrary to federal regulations, the County did not maintain documentation that it had verified 5 of 9 vendors we tested were not suspended or debarred from doing business with the federal government prior to making the purchases. The vendors were paid program monies totaling $740,467, or 49 percent of the program’s total federal award expenditures of $1.5 million. Effect—As the County could not demonstrate that at the time of the purchases it obtained services from vendors that had not been suspended or debarred from doing business with the federal government, the County was at increased risk that it could have paid federal program monies to unallowable vendors. Subsequently, we performed additional audit procedures and verified the vendors had not been suspended or debarred by the federal government. Finally, the County is at risk that this finding applies to other federal programs it administers. Cause—The County had informal procedures that were not consistently applied and lacked policies and procedures to verify that vendors, including those procured by the State of Arizona or through cooperative agreements, were not suspended or debarred from doing business with the federal government each year and to maintain documentation of this verification within the procurement files. Criteria—Federal regulations require the County to verify that vendors being paid more than $25,000 in federal program monies have not been suspended or debarred by either checking their suspension and debarment status, obtaining the vendor’s certification stating they are not suspended or debarred, and/or adding a condition regarding suspension and debarment to the purchase contract with the vendor (2 CFR §180.300). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that the federal program is being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The County should: 1. Verify and maintain documentation that a vendor being paid more than $25,000 in federal program monies has not been suspended or debarred from doing business with the federal government. 2. Develop policies and procedures and train staff to: a. Verify the vendor’s suspension and debarment status prior to making purchases by examining the federal government’s sam.gov website, obtaining certification from the vendor, or adding a condition in the vendor contract. b. Maintain documentation of this verification within the procurement files.
2024 – 004 Federal Agency: U.S. Department of Justice Federal Program Title: Crime Victim Assistance Federal Assistance Listing Number: 16.575 Federal Award and Identification Number and Year: 15POVC23GG00443ASSI-2024 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Number(s): A-CVS-2024-AMS-077 Award Period: 10/01/2023 to 09/30/2025 Type of Finding: Significant Deficiency in Internal Control over Major Federal Programs Criteria or Specific Requirement: Under 2 CFR section 200.303, a nonfederal entity must establish and maintain effective internal controls over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Timely review and approval should be maintained to ensure accurate amounts are being drawn down and accurate reports are submitted. Condition: The Organization did not have adequate internal controls in place for the full fiscal year to ensure cash drawdowns and required reports are approved by the appropriate personnel before being submitted. Questioned Costs: N/A Context: Two of the three reimbursement requests and five of the five reports selected for testing did not have support retained to show the drawdowns, financial status reports, and other performance reports were reviewed and approved prior to submission. Cause: Management did not have a separate individual assigned to review the cash drawdowns and required reports for the Crime Victim Assistance program after being prepared by the Director of Finance for the full fiscal year. Effect: Potential for inaccurate amounts of funds to be requested or inaccurate information reported. Repeat Finding: This is a repeat finding. Recommendation: A separate individual with supervisory authority over the preparer should be assigned to review and approve the cash drawdowns and reports prior to submission. Views of Responsible Officials and Planned Corrective Actions: The Organization has designated an individual to review and approve the cash drawdowns and reports prior to submission.
2024-002 Allowable Costs, Subrecipient Reimbursement Coronavirus State & Local Fiscal Recovery Funds – Assistance Listing No. 21.027 – COVID-19 Funding Award Number: 24 QAAA 186913 – Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: The Organization did not have records to adequately support costs reimbursed to a subrecipient for the month of August 2023. Criteria: According to 2 CFR 200.302(b)(3), The financial management system of each non-Federal entity must provide for the following: (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Additionally, 2 CFR 200.303(a) states the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Questioned Costs: The total amount reimbursed to the subrecipient for the month of August 2023 of $49,772.27. Cause: The Organization did not obtain source documentation from the sampled subrecipient supporting amounts reimbursed for the month of August 2023. Effect: Costs that are not allowable per the terms and conditions of the grant and/or Uniform Guidance, or improper costs passed through to subrecipients could be charged to the grant. Unallowable or improper costs could be required to be paid back to the Federal awarding agency (and/or pass-through entity). Recommendation: The Organization should strengthen policies and procedures to support a system of internal control regarding review and approval of subrecipient reimbursement requests to ensure costs are backed by source documentation supporting accuracy and allowability prior to payment. Views of Responsible Officials and Planned Corrective Actions: Invest in Kids made multiple requests for source documentation from the subrecipient. However, due to management turnover, the subrecipient lacked personnel with the knowledge to retrieve the requested information. Acknowledging this challenge, Invest in Kids updated its policies and procedures in October 2024. Additionally, all staff participated in the organization's annual financial management and internal controls training that same month. To note, upon completion of this audit, the subrecipient is no longer involved in Invest in Kids programming.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statues, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity’s compliance with statues, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” Additionally, Section 200.430 (g) states “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The section continues to clarify the records must “Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.” Condition During our testing of the Organization’s expenditures, we noted the following deficiencies in internal controls: 1. 7 of the 50 non-payroll samples selected for testing lacked evidence of approval. 2. Management had incorrectly allocated time for 10 of the 50 payroll transactions selected for testing. 3. One employee selected for payroll testing had been compensated, and expenses allocated to the GL, at a rate other than what had been approved for the individual. Cause The Agency has not implemented sufficient internal control policies to adhere to the requirements of Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from federal and state awarding agencies. Recommendation We recommend the Agency establish and maintain effective internal control over Federal Awards in order to provide reasonable assurance that the Agency is managing the Awards in compliance with Federal statutes and regulations, as well as the terms and conditions set forth in the specific Federal Award. Additionally, we recommend the Agency implement proper internal control procedures to document hours worked, by employee, by grant; and maintain documentation to support charges allocated to each Federal award.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statues, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity’s compliance with statues, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” Additionally, Section 200.430 (g) states “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The section continues to clarify the records must “Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.” Condition During our testing of the Organization’s expenditures, we noted the following deficiencies in internal controls: 1. 7 of the 50 non-payroll samples selected for testing lacked evidence of approval. 2. Management had incorrectly allocated time for 10 of the 50 payroll transactions selected for testing. 3. One employee selected for payroll testing had been compensated, and expenses allocated to the GL, at a rate other than what had been approved for the individual. Cause The Agency has not implemented sufficient internal control policies to adhere to the requirements of Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from federal and state awarding agencies. Recommendation We recommend the Agency establish and maintain effective internal control over Federal Awards in order to provide reasonable assurance that the Agency is managing the Awards in compliance with Federal statutes and regulations, as well as the terms and conditions set forth in the specific Federal Award. Additionally, we recommend the Agency implement proper internal control procedures to document hours worked, by employee, by grant; and maintain documentation to support charges allocated to each Federal award.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statues, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity’s compliance with statues, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” Additionally, Section 200.430 (g) states “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The section continues to clarify the records must “Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.” Condition During our testing of the Organization’s expenditures, we noted the following deficiencies in internal controls: 1. 7 of the 50 non-payroll samples selected for testing lacked evidence of approval. 2. Management had incorrectly allocated time for 10 of the 50 payroll transactions selected for testing. 3. One employee selected for payroll testing had been compensated, and expenses allocated to the GL, at a rate other than what had been approved for the individual. Cause The Agency has not implemented sufficient internal control policies to adhere to the requirements of Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from federal and state awarding agencies. Recommendation We recommend the Agency establish and maintain effective internal control over Federal Awards in order to provide reasonable assurance that the Agency is managing the Awards in compliance with Federal statutes and regulations, as well as the terms and conditions set forth in the specific Federal Award. Additionally, we recommend the Agency implement proper internal control procedures to document hours worked, by employee, by grant; and maintain documentation to support charges allocated to each Federal award.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statues, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity’s compliance with statues, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” Additionally, Section 200.430 (g) states “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The section continues to clarify the records must “Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.” Condition During our testing of the Organization’s expenditures, we noted the following deficiencies in internal controls: 1. 7 of the 50 non-payroll samples selected for testing lacked evidence of approval. 2. Management had incorrectly allocated time for 10 of the 50 payroll transactions selected for testing. 3. One employee selected for payroll testing had been compensated, and expenses allocated to the GL, at a rate other than what had been approved for the individual. Cause The Agency has not implemented sufficient internal control policies to adhere to the requirements of Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from federal and state awarding agencies. Recommendation We recommend the Agency establish and maintain effective internal control over Federal Awards in order to provide reasonable assurance that the Agency is managing the Awards in compliance with Federal statutes and regulations, as well as the terms and conditions set forth in the specific Federal Award. Additionally, we recommend the Agency implement proper internal control procedures to document hours worked, by employee, by grant; and maintain documentation to support charges allocated to each Federal award.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statues, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity’s compliance with statues, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” Additionally, Section 200.430 (g) states “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The section continues to clarify the records must “Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.” Condition During our testing of the Organization’s expenditures, we noted the following deficiencies in internal controls: 1. 7 of the 50 non-payroll samples selected for testing lacked evidence of approval. 2. Management had incorrectly allocated time for 10 of the 50 payroll transactions selected for testing. 3. One employee selected for payroll testing had been compensated, and expenses allocated to the GL, at a rate other than what had been approved for the individual. Cause The Agency has not implemented sufficient internal control policies to adhere to the requirements of Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from federal and state awarding agencies. Recommendation We recommend the Agency establish and maintain effective internal control over Federal Awards in order to provide reasonable assurance that the Agency is managing the Awards in compliance with Federal statutes and regulations, as well as the terms and conditions set forth in the specific Federal Award. Additionally, we recommend the Agency implement proper internal control procedures to document hours worked, by employee, by grant; and maintain documentation to support charges allocated to each Federal award.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statues, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity’s compliance with statues, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” Additionally, Section 200.430 (g) states “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The section continues to clarify the records must “Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.” Condition During our testing of the Organization’s expenditures, we noted the following deficiencies in internal controls: 1. 7 of the 50 non-payroll samples selected for testing lacked evidence of approval. 2. Management had incorrectly allocated time for 10 of the 50 payroll transactions selected for testing. 3. One employee selected for payroll testing had been compensated, and expenses allocated to the GL, at a rate other than what had been approved for the individual. Cause The Agency has not implemented sufficient internal control policies to adhere to the requirements of Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from federal and state awarding agencies. Recommendation We recommend the Agency establish and maintain effective internal control over Federal Awards in order to provide reasonable assurance that the Agency is managing the Awards in compliance with Federal statutes and regulations, as well as the terms and conditions set forth in the specific Federal Award. Additionally, we recommend the Agency implement proper internal control procedures to document hours worked, by employee, by grant; and maintain documentation to support charges allocated to each Federal award.
Criteria Title 2, Code of Federal Regulations (CFR), Subtitle A, Chapter II, Part 200, Subpart D, Cost Principles for Non-Profit Organizations, Section 200.303 states “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal Statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (b) Comply with Federal statues, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity’s compliance with statues, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. (e) Take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, state, local, and tribal laws regarding privacy and obligations of confidentiality.” Additionally, Section 200.430 (g) states “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The section continues to clarify the records must “Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.” Condition During our testing of the Organization’s expenditures, we noted the following deficiencies in internal controls: 1. 7 of the 50 non-payroll samples selected for testing lacked evidence of approval. 2. Management had incorrectly allocated time for 10 of the 50 payroll transactions selected for testing. 3. One employee selected for payroll testing had been compensated, and expenses allocated to the GL, at a rate other than what had been approved for the individual. Cause The Agency has not implemented sufficient internal control policies to adhere to the requirements of Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from federal and state awarding agencies. Recommendation We recommend the Agency establish and maintain effective internal control over Federal Awards in order to provide reasonable assurance that the Agency is managing the Awards in compliance with Federal statutes and regulations, as well as the terms and conditions set forth in the specific Federal Award. Additionally, we recommend the Agency implement proper internal control procedures to document hours worked, by employee, by grant; and maintain documentation to support charges allocated to each Federal award.
2024-001 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: COVID – 19 Education Stabilization Fund Assistance Listing Numbers: 84.425D/84.425U Passed-through Identification: #20220358 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant Deficiency Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the ESSER III (#20220358) grant it was noted the district gave out retention bonuses to all staff working at Haverhill Cooperative School District. Although a record of bonus recipients was maintained, it was not formally approved by the Superintendent and/or the School Board. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee’s wages paid using grant funds. Questioned Costs: $33,557 Repeat Finding: No Recommendation: We recommend that if the district chooses to maintain a master spreadsheet for stipends or retention bonuses, the list should be formally reviewed and approved by both the School Board and the Superintendent. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Finding 2024-007: Time Accounting (50000) Repeat Finding? This is a partial repeat of Finding 2023-009. Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) Criteria: 2 CFR, section 200.430 states, in part: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR, section 200.303 states, in part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: Be prepared at least semiannually. Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: Five employees that had complete PARs for time accounting had the following deficiencies: Salaries and benefits were charged 100% to Title I, Part A for these individuals, each month’s salary was not reconciled to reflect the percentage on their PARs. PARs were only provided for 4 months of the fiscal year, the remaining PAR reports requested were not provided. Context: Exceptions were identified for all five employees who were subject to PAR reporting. Questioned Costs: Auditor is estimating that Title I, Part A, was overcharged by $30,205 because the District did not modify each month’s charges to the actual percentage worked on the program. This overcharge was based on averaging the percentage for the four months of PARs we were provided. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Estimated cost questioned of $30,205 for the 2023-24 fiscal year. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The District acknowledges this finding and is committed to strengthening internal controls to ensure compliance with federal time accounting requirements. The State and Federal Programs Department has received training on Time and Effort procedures, and additional training is being provided to school sites to reinforce accurate time certification and documentation for federal fund expenditures. To address the deficiencies, the District will shift from an annual to a monthly reconciliation process, ensuring that employee salaries charged to Title I accurately reflect actual work performed. The State and Federal Programs Department will collaborate with the Budget Department to systematically track employees funded through Title I and verify that all required PARs are completed and maintained. These corrective actions will enhance oversight, reduce the risk of discrepancies, and improve compliance with federal regulations. The District is committed to ongoing monitoring and training to prevent recurrence and ensure the integrity of financial reporting.
SIGNIFICANT DEFICIENCY 2024-001 – Allowed/Unallowed Activities/Costs Federal Program Information: Department of Education CFDA - 84.010A - Title I Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 and 2 CFR 200.430 g Condition: During audit procedures, it was identified that the Unit charged unallowable costs to the grant. It was also identified that the unit is incorrectly documenting wages. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit is not ensuring that staff has the appropriate compliance knowledge on allowable and unallowable costs to minimize the inherent risk of unallowable charges to the grant, which could result in return of funding. Of the 5 disbursements reviewed and tested 2 were for unallowable costs that had been charged to the grant. The unit is not consistent with wage documentation which can result in incorrect amounts being paid to personnel. Of the 25 samples reviewed, two staff did not have wage rates documented in the file of which one of them was paid according to the Collective Bargaining Agreement, however the amount paid was incorrect and there is no documentation for the employee who worked just for the summer. Another employee’s contract stated the incorrect salary but was correctly stated in the payroll system. Lastly one hourly employee’s pay was prorated when it shouldn’t have been resulting in an overpayment. Identification of Questioned Costs: None identified. Context: Of a population of 12 AP samples 5 were examined and tested and of a population of 56 payroll samples 25 were examined and tested. This is not a statistically valid sample. Repeat Finding: This is a repeat finding of 2023-002 Recommendation: It is recommended that the Unit implements internal control processes and procedures to ensure that the unit stays in compliance with allowable costs and activities and correct and accurate documentation is being maintained and recorded. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan.
SIGNIFICANT DEFICIENCY 2024-001 – Allowed/Unallowed Activities/Costs Federal Program Information: Department of Education CFDA - 84.010A - Title I Criteria: The following CFR(s) apply to this finding: 2 CFR 200.303 and 2 CFR 200.430 g Condition: During audit procedures, it was identified that the Unit charged unallowable costs to the grant. It was also identified that the unit is incorrectly documenting wages. Cause: The Unit does not have the necessary internal controls over compliance. Effect: The Unit is not ensuring that staff has the appropriate compliance knowledge on allowable and unallowable costs to minimize the inherent risk of unallowable charges to the grant, which could result in return of funding. Of the 5 disbursements reviewed and tested 2 were for unallowable costs that had been charged to the grant. The unit is not consistent with wage documentation which can result in incorrect amounts being paid to personnel. Of the 25 samples reviewed, two staff did not have wage rates documented in the file of which one of them was paid according to the Collective Bargaining Agreement, however the amount paid was incorrect and there is no documentation for the employee who worked just for the summer. Another employee’s contract stated the incorrect salary but was correctly stated in the payroll system. Lastly one hourly employee’s pay was prorated when it shouldn’t have been resulting in an overpayment. Identification of Questioned Costs: None identified. Context: Of a population of 12 AP samples 5 were examined and tested and of a population of 56 payroll samples 25 were examined and tested. This is not a statistically valid sample. Repeat Finding: This is a repeat finding of 2023-002 Recommendation: It is recommended that the Unit implements internal control processes and procedures to ensure that the unit stays in compliance with allowable costs and activities and correct and accurate documentation is being maintained and recorded. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan.
2024-008: U.S. Department of Interior Direct award and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all awards under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that charges for salaries and wages must be based on records that accurately reflect the work performed. In part, the records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that, in part, that the system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the federal award is accurate, allowable, and properly allocated. 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 provides that non-federal entities must establish and maintain effect internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Labor rates charged to the federal award did not agree to underlying support of payroll costs. In addition, labor rates were not reviewed prior to being charged to the federal award. Cause: Tahoe Douglas Fire Protection District (the District) did not have adequate internal controls to ensure payroll costs charged to the federal award were accurate. Effect: Inaccurate payroll costs were charged to the federal award, which resulted in an underbilling of actual payroll costs. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 ($50,798) out of a population of 433 ($420,962) payroll expenditures at the District was selected for testing. We noted 24 payroll transactions did not agree to underlying support for the employees payroll and fringe rate. These 24 payroll transactions totaled $20,798 and were underbilled to the federal award by $422. In addition, the labor rates charged to the federal award were not reviewed on any of the 60 transactions. Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to ensure payroll costs charged to the federal award are accurate. Views of Responsible Officials: Tahoe Douglas Fire Protection District agrees with this finding.
2024-009: U.S. Department of The Interior Direct award and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Cash Management Significant Deficiency in Internal Control over Compliance Grant Award Number: Potentially affects all grant awards included under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: 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 provides that non-federal entities must establish and maintain effect internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: There was no evidence of review and approval (segregation of duties) between the preparer and reviewer. Cause: Tahoe Douglas Fire Protection District (the District) did not have adequate internal controls to provide for the documented review and approval of Requests for Reimbursement. Effect: Inaccurate information may be reported and funds may not be drawn on a reimbursement basis. Questioned Costs: None Context/Sampling: A nonstatistical sample of 2 Requests for Reimbursement out of a population of 4 was selected for testing. We noted that there was no evidence of review on one of the Requests for Reimbursement. Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to provide for the documented review and approval of Requests for Reimbursement. Views of Responsible Officials: Tahoe Douglas Fire Protection District agrees with this finding.
2024-010: U.S. Department of Interior Direct award and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: 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 provides that non-federal entities must establish and maintain effect internal control 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. The grant awards require the submission of Federal Financial Reports (SF-425) and Performance Reports. Condition: There was no evidence of review and approval (segregation of duties) between the preparer and reviewer. Information reported did not agree to underlying supporting records. Cause: Tahoe Douglas Fire Protection District (the District) did not have adequate internal controls to provide for the documented review and approval of SF-425 reports or Performance Reports. Effect: Inaccurate information was reported to the federal agency on the SF-425 and inaccurate information was reported to the pass-through entity on the Performance Reports. Questioned Costs: None Context/Sampling: A non-statistical sample of two SF-425 reports out of a population of four was selected for testing. A non-statistical sample of two Performance Reports out of a population of four was selected for testing. We noted that there was no evidence of review on all four reports tested. Amounts reported on all four reports tested did not agree to underlying support. Errors are noted as follows: SF-425 for Quarter Ended 9/30/2023: SF-425 for Quarter Ended 3/31/2024: Performance Report to TRCD for Quarter End 9/30/2023: Performance Report to TRCD for Quarter End 12/31/2023: Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to provide for the documented review and approval of SF-425 reports and Performance Reports. Views of Responsible Officials: Tahoe Douglas Fire Protection District agrees with this finding.
2024-008: U.S. Department of Interior Direct award and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Grant Award Number: Affects all awards under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states that charges for salaries and wages must be based on records that accurately reflect the work performed. In part, the records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that, in part, that the system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the federal award is accurate, allowable, and properly allocated. 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 provides that non-federal entities must establish and maintain effect internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Labor rates charged to the federal award did not agree to underlying support of payroll costs. In addition, labor rates were not reviewed prior to being charged to the federal award. Cause: Tahoe Douglas Fire Protection District (the District) did not have adequate internal controls to ensure payroll costs charged to the federal award were accurate. Effect: Inaccurate payroll costs were charged to the federal award, which resulted in an underbilling of actual payroll costs. Questioned Costs: None Context/Sampling: A nonstatistical sample of 60 ($50,798) out of a population of 433 ($420,962) payroll expenditures at the District was selected for testing. We noted 24 payroll transactions did not agree to underlying support for the employees payroll and fringe rate. These 24 payroll transactions totaled $20,798 and were underbilled to the federal award by $422. In addition, the labor rates charged to the federal award were not reviewed on any of the 60 transactions. Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to ensure payroll costs charged to the federal award are accurate. Views of Responsible Officials: Tahoe Douglas Fire Protection District agrees with this finding.
2024-009: U.S. Department of The Interior Direct award and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Cash Management Significant Deficiency in Internal Control over Compliance Grant Award Number: Potentially affects all grant awards included under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: 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 provides that non-federal entities must establish and maintain effect internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: There was no evidence of review and approval (segregation of duties) between the preparer and reviewer. Cause: Tahoe Douglas Fire Protection District (the District) did not have adequate internal controls to provide for the documented review and approval of Requests for Reimbursement. Effect: Inaccurate information may be reported and funds may not be drawn on a reimbursement basis. Questioned Costs: None Context/Sampling: A nonstatistical sample of 2 Requests for Reimbursement out of a population of 4 was selected for testing. We noted that there was no evidence of review on one of the Requests for Reimbursement. Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to provide for the documented review and approval of Requests for Reimbursement. Views of Responsible Officials: Tahoe Douglas Fire Protection District agrees with this finding.
2024-010: U.S. Department of Interior Direct award and Pass-through Tahoe Resource Conservation District Southern Nevada Public Land Management, 15.235 Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Grant Award Number: Affects all grant awards included under assistance listing 15.235 on the Schedule of Expenditures of Federal Awards. Criteria: 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 provides that non-federal entities must establish and maintain effect internal control 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. The grant awards require the submission of Federal Financial Reports (SF-425) and Performance Reports. Condition: There was no evidence of review and approval (segregation of duties) between the preparer and reviewer. Information reported did not agree to underlying supporting records. Cause: Tahoe Douglas Fire Protection District (the District) did not have adequate internal controls to provide for the documented review and approval of SF-425 reports or Performance Reports. Effect: Inaccurate information was reported to the federal agency on the SF-425 and inaccurate information was reported to the pass-through entity on the Performance Reports. Questioned Costs: None Context/Sampling: A non-statistical sample of two SF-425 reports out of a population of four was selected for testing. A non-statistical sample of two Performance Reports out of a population of four was selected for testing. We noted that there was no evidence of review on all four reports tested. Amounts reported on all four reports tested did not agree to underlying support. Errors are noted as follows: SF-425 for Quarter Ended 9/30/2023: SF-425 for Quarter Ended 3/31/2024: Performance Report to TRCD for Quarter End 9/30/2023: Performance Report to TRCD for Quarter End 12/31/2023: Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to provide for the documented review and approval of SF-425 reports and Performance Reports. Views of Responsible Officials: Tahoe Douglas Fire Protection District agrees with this finding.
2024-005: U.S. Department of Homeland Security Assistance to Firefighters Grant, 97.044 Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards EMW-2022-FG-03975 under assistance listing 97.044 on the Schedule of Expenditures of Federal Awards. Criteria: 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 provides that non-federal entities must establish and maintain effective internal control 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. The grant awards require the submission of Federal Financial Reports (SF-425). Condition: Information reported did not agree to underlying supporting records. Cause: North Lake Tahoe Fire Protection District (the District) did not have adequate internal controls to provide for accurate reporting of the SF-425 report. Effect: Inaccurate information was reported to the federal agency. Questioned Costs: None Context/Sampling: A non-statistical sample of three SF-425 reports out of a population of eight was selected for testing. Amounts reported on one of the three reports tested did not agree to underlying support. An error was noted as follows: SF-425 for Quarter Ended 12/31/2023 for grant EMW-03975: Key Line Item Amount Reported Amount Supported Cash Disbursements $76,855.71 $0 Repeat Finding from Prior Year: No Recommendation: We recommend the District enhance internal controls to provide for accurate reporting of the SF-425 report. Views of Responsible Officials: North Lake Tahoe Fire Protection District agrees with this finding.
Program: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Financial Assistance Listing Number: 14.251 Federal Agency: U.S. Department of Housing and Urban Development Award Year: 2024 Grant Award Number: B-23-CP-CA-0240 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control over Compliance and Instance of Non- Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal awards in order to provide reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per the Economic Development Initiative Community Project Funding Grant Guide, the requirements of Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR Part 75 apply to all grant recipients that are awarded $200,000 or more for projects involving housing construction, rehabilitation, or other public construction. Condition: We identified one (1) project, “Courtplace”, in which Section 3 requirements are applicable to the City. The City was unable to provide supporting documentation to demonstrate that Section 3 requirements were communicated and followed by the applicable project contractor. Cause: The City did not have effective controls in place to ensure all compliance requirements were met. Effect: The City is not in compliance with Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR Part 75. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A sample of one (1) out of one (1) applicable contractor was selected for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City implement additional policies and procedures to ensure that Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR Part 75 requirements are complied with. Views of Responsible Official: Management agrees. See separately issued Corrective Action Plan.
Program: Economic Development Initiative, Community Project Funding, and Miscellaneous Grants Financial Assistance Listing Number: 14.251 Federal Agency: U.S. Department of Housing and Urban Development Award Year: 2024 Grant Award Number: B-23-CP-CA-0240 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency in Internal Control over Compliance and Instance of Non- Compliance Criteria: Per 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal awards in order to provide reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per the Economic Development Initiative Community Project Funding Grant Guide, the requirements of Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR Part 75 apply to all grant recipients that are awarded $200,000 or more for projects involving housing construction, rehabilitation, or other public construction. Condition: We identified one (1) project, “Courtplace”, in which Section 3 requirements are applicable to the City. The City was unable to provide supporting documentation to demonstrate that Section 3 requirements were communicated and followed by the applicable project contractor. Cause: The City did not have effective controls in place to ensure all compliance requirements were met. Effect: The City is not in compliance with Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR Part 75. Questioned Costs: No questioned costs were identified as a result of our audit procedures. Context/Sampling: A sample of one (1) out of one (1) applicable contractor was selected for testing. Repeat Finding from the Prior Year(s): No. Recommendation: We recommend that the City implement additional policies and procedures to ensure that Section 3 of the Housing and Urban Development Act of 1968 found at 24 CFR Part 75 requirements are complied with. Views of Responsible Official: Management agrees. See separately issued Corrective Action Plan.
FINDING - Noncompliance with Grant Report Requirements Federal Agency: Department of Education Assistance Listing Numbers: 84.425F Program Names and Award Numbers: Education Stabilization Fund Under the Coronavirus Aid, Relief, And Economic Security Act [COVID-19 Higher Education Emergency Relief Fund: Institution Portion (P425F200852)] Program Expenditures: $2,160,298 Questioned Costs: None Northeastern Illinois University (University) did not have adequate procedures in place to ensure the Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) reports were accurate and timely submitted to the U.S. Department of Education and posted to the University’s website. CONDITIONS FOUND & CRITERIA During our testing of the University’s compliance with the grant reporting requirements for HEERF, we noted the University did not review the required reports to ensure accuracy and compliance with the reporting requirements of the grant agreement. We noted the following: - Four of 4 (100%) Quarterly Public Reports improperly did not report the cumulative student aid disbursed for each undergraduate and graduate student. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the posting of cumulative student aid disbursed by quarter for both undergraduate and graduate. - Two of 4 (50%) Quarterly Public Reports were posted 175 days and 84 days late to the University’s website. The Department of Education Quarterly Budget and Expenditure Reporting Form requires the University to post the Quarterly Public Reports covering each quarterly reporting period (September 30, December 31, March 31, June 30), no later than 10 days after the end of each calendar quarter. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards to establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. CAUSE University officials stated required reports were not timely and accurately submitted due to turnover within the University resulting in staffing constraint. EFFECT Failure to meet grant reporting requirements is noncompliance with federal regulations and could result in loss of grant funding in future years. (Finding Code No. 2024-007, 2023-007, 2022-005, 2021-008, 2020-011) RECOMMENDATION We recommend the University improve its grant reporting and monitoring process to adhere with grant requests for reporting utilizing a calendar schedule and proper review before submission. UNIVERSITY RESPONSE The University agrees with the recommendation.
Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, 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. Condition and context: During our testing we noted two instances where the Organization was unable to provide documentation that the request for payment was approved prior to the drawdown date. In both instances we also noted that a portion of the funds drawn down had yet to have costs incurred to support drawing down those funds. Effect: The auditor noted instances of noncompliance. Noncompliance results in federal funds being drawn down prior to the costs being incurred by the Organization. Questioned costs: None identified. Cause: The Organization does not have internal controls in place to ensure compliance with Federal regulations or the terms and conditions of the Federal award. Recommendation: We recommend that the Organization create effective internal controls and procedures over the cash management process and drawdowns of federal funds that allows for compliance with all applicable Federal laws, regulations, and compliance requirements of various Federal grants. Views of responsible officials: The Organization will review grant requirements and make sure that drawdown terms are followed and that a review will take place over any drawdowns prior to requesting the funds.
Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, 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. Condition and context: During our testing we noted two instances where the Organization was unable to provide documentation that the request for payment was approved prior to the drawdown date. In both instances we also noted that a portion of the funds drawn down had yet to have costs incurred to support drawing down those funds. Effect: The auditor noted instances of noncompliance. Noncompliance results in federal funds being drawn down prior to the costs being incurred by the Organization. Questioned costs: None identified. Cause: The Organization does not have internal controls in place to ensure compliance with Federal regulations or the terms and conditions of the Federal award. Recommendation: We recommend that the Organization create effective internal controls and procedures over the cash management process and drawdowns of federal funds that allows for compliance with all applicable Federal laws, regulations, and compliance requirements of various Federal grants. Views of responsible officials: The Organization will review grant requirements and make sure that drawdown terms are followed and that a review will take place over any drawdowns prior to requesting the funds.
Criteria or specific requirement: According to § 2 CFR 200.303 Internal controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1 Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition and context: During our testing we noted three instances where the Organization allocated allowable expenses incurred outside of the period of performance dates. Effect: The auditor noted instances of noncompliance. Noncompliance results in federal funds being used outside of the grant period. Questioned costs: $53,077 Cause: The Organization does not have internal controls in place to ensure compliance with Federal regulations or the terms and conditions of the Federal award. Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on invoice date to ensure the incurred date is within the proper period of performance. Views of responsible officials: The Organization will review grant requirements and make sure that allowable costs are incurred and allocated to the grant within the grant period.
Criteria or specific requirement: According to § 2 CFR 200.303 Internal controls, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. According to 2 CFR 200.1 Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods. Condition and context: During our testing we noted three instances where the Organization allocated allowable expenses incurred outside of the period of performance dates. Effect: The auditor noted instances of noncompliance. Noncompliance results in federal funds being used outside of the grant period. Questioned costs: $53,077 Cause: The Organization does not have internal controls in place to ensure compliance with Federal regulations or the terms and conditions of the Federal award. Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on invoice date to ensure the incurred date is within the proper period of performance. Views of responsible officials: The Organization will review grant requirements and make sure that allowable costs are incurred and allocated to the grant within the grant period.
2024-031 Oregon Department of Education Implement controls to ensure FFATA reporting is completed for all required subawards Federal Awarding Agency: U.S. Department of Education Assistance Listing Number and Name: 10.582 Fresh Fruit and Vegetable Program (Child Nutrition Cluster) Federal Award Numbers and Years: 202322L160347, 2023; 202423L160347, 2024 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 2 CFR 170; 2 CFR 200.303 The Child Nutrition Cluster is subject to subaward reporting under the Federal Funding Accountability and Transparency Act (FFATA). Federal regulations require recipients of federal awards to report certain subaward information in the FFATA Subaward Reporting System (FSRS) for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the obligation was made. Federal regulations also require recipients of federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The department maintains written procedures that document the steps for completing the monthly FFATA reporting. For the Child Nutrition Program, only the Fresh Fruit and Vegetable program is subject to FFATA reporting. Our audit procedures included the testing of 20 Fresh Fruit and Vegetable subawards/subaward modifications totaling $647,311 in obligations. During our testing we noted 9 subawards were not reported to FSRS totaling $213,992. According to department management, it had initially overlooked FFATA reporting for the Fresh Fruit and Vegetable subaward so was still working on submitting the subaward in FSRS. We recommend department management strengthen controls to ensure the monthly FFATA reports are submitted.
2024-038 Oregon Business Development Department Implement controls over reporting Federal Awarding Agency: U.S. Department of the Treasury Assistance Listing Number and Name: 21.027 Coronavirus State and Local Fiscal Recovery Fund (COVID-19) Federal Award Numbers and Years: SLFRP4454, 2020 (COVID-19) Compliance Requirements: Reporting Type of Finding: Significant Deficiency Prior Year Findings: 2023-043 Questioned Costs: N/A Criteria: 2 CFR 200.303 Department management is responsible for establishing and maintaining effective internal controls that provide reasonable assurance the department is managing the federal award in compliance with the terms and conditions of the federal award. Recipients of Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) are required to provide quarterly project and expenditure reports to the Department of Administrative Services’ Coronavirus Fiscal Relief Team (DAS CFRT), who compiles the statewide report and submits it to the Department of the Treasury. The quarterly CSLFRF reports require several types of information and updates to be included each quarter, including project descriptions, completion status, and contracted entity details. The report also includes information on obligations and expenditures, provided by the fiscal staff. An Infrastructure Program Specialist works directly with the project management team assigned to the projects and compiles the information into a report spreadsheet. Once compiled, it is transmitted directly to DAS with no additional internal review. The report submitted for infrastructure projects under interagency agreement 6203 and 6252 for the quarter ending June 30, 2024, reported $46.7 million in cumulative expenditures, but $48.3 million were recorded in accounting records, resulting in an under-reporting of expenditures by $1.6 million, or 3.4%. CSLFRF awards must be used for costs incurred (obligated) by December 31, 2024, and expended for those incurred costs by December 31, 2026. Any funds not expended must be returned to the Department of the Treasury at the end of the grant. Because the department’s reporting process did not include a review by fiscal staff prior to submission to DAS to ensure the report included accurate expenditure and obligation information, the department risks the potential loss of CSLFRF funds. We recommend the department implement a review by fiscal staff of expenditure and obligation amounts on CSLFRF quarterly reports before submission to DAS CFRT to ensure the reports agree to the accounting records.
2024-043 Oregon Department of Veterans’ Affairs Ensure accuracy of per diem recalculations Federal Awarding Agency: U.S. Department of Veterans Affairs Assistance Listing Number and Name: 64.015 Veterans State Nursing Home Care Federal Award Numbers and Years: 648-Y37190, 2023; 648-Y37191, 2023; 648-Y47191, 2024; 648-Y48191, 2024 Compliance Requirements: Activities Allowed or Unallowed Type of Finding: Significant Deficiency Prior Year Findings: N/A Questioned Costs: N/A Criteria: 2 CFR 200.303; 38 CFR 51.40 Federal regulations allow for the department to request a per diem from the federal awarding agency each month for every day an eligible veteran resides in a veteran state nursing home. Federal regulations require the department establish, document, and maintain effective internal control over the federal award that provides reasonable assurance they are managing the federal award in compliance with federal statutes. The department performs a recalculation for each per diem to provide reasonable assurance they are managing the award in compliance with federal statutes. We selected a total of eight out of 24 per diem requests for review. Of the eight requests we reviewed, we identified four requests where the recalculation performed was not accurate. The recalculated per diem totals did not agree to the actual amount requested, due to differences in the number of resident per diem days or per diem amounts used in the recalculation. Department staff has indicated the recalculation has been updated over the past year as staff has become more familiar with the recalculation process, but additional updates are still needed. Without an appropriate recalculation, the department may request a per diem for ineligible individuals residing in the nursing home, or the per diem may be for an incorrect number of days. We recommend department management strengthen internal controls to ensure per diem requests are accurately recalculated.
2024-022 Oregon Department of Human Services Improve controls to ensure eligibility criteria are met Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.558 Temporary Assistance for Needy Families Federal Award Numbers and Years: 2301ORTANF, 2023; 2401ORTANF, 2024 Compliance Requirements: Eligibility; Special Tests and Provisions Type of Finding: Significant Deficiency, Noncompliance Prior Year Findings: 2023-027; 2022-039; 2022-040 Questioned Costs: $5,187 (known); $4,499,112 (likely) Criteria: 42 USC 602(a)(1)(A) & (B)(iii); 45 CFR 264.10; 2 CFR 200.303 Federal regulations state the department is responsible for creating and submitting a state plan that outlines how the program will be conducted to meet the objectives of the Temporary Assistance for Needy Families (TANF) program. This includes the criteria used to determine the eligibility of TANF applicants. Additionally, federal regulations require each state must meet the requirements of the Income Eligibility and Verification System (IEVS) and request certain information from the Internal Revenue Service, State Wage Information Collections Agency, Social Security Administration, and Immigration and Naturalization Service when making TANF eligibility determinations. Department management is responsible for establishing and maintaining effective internal controls to provide reasonable assurance the program is being operated in accordance with federal regulations. To help ensure eligibility determinations are made in accordance with the approved state plan, the department’s Program Integrity Unit (PIU) performs approximately 17 case eligibility reviews per month. These reviews confirm the appropriateness of eligibility determinations based on client information documented in the case management system. Identified errors are referred to the applicable branch office for correction and to determine if additional training is needed. We tested a random sample of 18 of 173 PIU case eligibility reviews performed during fiscal year 2024 specific to federally funded TANF cases to determine the effectiveness of the control. One case review identified an eligibility error which was not referred to the branch office. According to the department, this case review was on the schedule of findings; however, the communication to the branch office was not completed for unknown reasons. Failure to communicate issues identified during the case reviews reduces the control’s effectiveness in ensuring eligibility determinations are appropriately made and potential training opportunities are identified at the branch office. We also tested a random sample of 60 of 193,547 client benefit months (one client for one benefit month) during fiscal year 2024 to determine if the clients met the applicable eligibility requirements and the department performed the appropriate IEVS data checks in accordance with federal requirements. We identified the following errors, which were the result of caseworker errors in documenting the completion of the required eligibility steps in accordance with established enrollment procedures: • For one case, unearned income from an unemployment claim was not factored into the initial eligibility determination and subsequent benefit month calculations as required resulting in known questioned costs of $2,754. • For one case, the procedure regarding the non-financial eligibility requirement for pursuit of available assets was not followed to either obtain the client’s statement of intent to pursue unemployment or document good cause for the client’s non-pursuit of the asset resulting in known questioned costs of $2,433. • For one case, the department did not document the required IEVS check during the initial eligibility determination. However, we did not identify questioned costs associated with this case, as case documentation supported the applicant’s eligibility. The likely questioned costs total $4,499,112 based on the known questioned costs identified in our sample test. We recommend department management ensure case eligibility reviews are performed in accordance with the established procedures. We also recommend department management ensure caseworkers are adequately trained on TANF enrollment procedures to ensure all applicable requirements are met.
2024-023 Oregon Department of Human Services Strengthen controls over program expenditures Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.558 Temporary Assistance for Needy Families Federal Award Numbers and Years: 2301ORTANF, 2023; 2401ORTANF, 2024 Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles Type of Finding: Significant Deficiency, Noncompliance Prior Year Findings: N/A Questioned Costs: $2,962 (known); $415,856 (likely) Criteria: 2 CFR 200.303 The Temporary Assistance for Needy Families (TANF) program provides time limited cash assistance to eligible needy families with children. Department management is responsible for establishing and maintaining effective internal controls to provide reasonable assurance the program is being operated in accordance with federal regulations. We identified two instances during our testing where expenditures were inappropriately charged to the TANF program: • We tested a random sample of 60 of 193,547 client benefit months (one client for one benefit month) during fiscal year 2024 to determine if the payments made to the clients during those months were for allowable activities under the TANF program. One transaction was determined to be a duplicate payment for housing support services assistance. A check was issued to a participant for two months of rent and late fees to assist the family in maintaining stable housing. According to a case narrative in the case management system, the check was stated to have been lost and a second check was issued directly to the participant’s landlord. However, the original check was cashed prior to being canceled resulting in the duplicate expenditure for the same assistance payment. The duplicate payment resulted in known questioned costs of $2,419 and likely questioned costs of $415,856. • We tested a random sample of 25 of 37,987 child welfare TANF transactions during fiscal year 2024 to determine if the transactions were for allowable activities under the TANF program. One child welfare TANF transaction was determined to be a correction that did not refund the TANF program as intended. We identified known questioned costs of $543 due to the error. The known questioned costs were not projected to the population due to the uncommon nature of canceled and refunded transactions. We recommend department management strengthen controls to ensure program expenditures and corrections are properly recorded.
2024-033 Oregon Housing and Community Services Federal reports should contain accurate information Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.568 Low-Income Home Energy Assistance Program Federal Award Numbers and Years: 2302ORLIEI, 2023 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 2 CFR 200.302(b)(2); 2 CFR 200.303 Federal regulations require that federal reports are accurate and supported by applicable accounting records. Federal regulations also require management to establish and maintain effective internal control over the federal award. Based on our testing, we identified multiple reports where the amount of obligated funds for the Infrastructure Investment and Jobs Act (IIJA) was not appropriately reported. Funds for this grant were obligated through separate contracts, which differed from the department’s standard process of obligating funds through their grant management system application. At the time these reports were completed, the preparing staff did not have a summary of the IIJA obligations, which resulted in errors in the following September 2023 report line items: • SF-425, Federal Share of Unliquidated Obligations • LIHEAP Performance Data Form, Unobligated Infrastructure Act Funds Carried Over to next FFY • LIHEAP Carryover and Reallotment Report, Carryover Amount • LIHEAP Quarterly Performance and Management Report, Amount of Funds Obligated. Additionally, documentation was not retained to show this report was approved. Based on submitted reports, it appeared the department did not obligate at least 90% of the award by September 30, 2023, as required. However, based on our testing we determined the department had obligated over 90% of the award by September 30, 2023. We recommend department management strengthen internal controls to ensure the required LIHEAP reports contain accurate information.
2024-010 Oregon Health Authority Submit required Federal Funding Accountability and Transparency Act reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.788 Opioid STR 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.788: H79TI085732, 2023; H79TI085732, 2024 93.958: B09SM086032, 2022; B09SM087383, 2023 93.959: B08TI084667, 2022; B08TI085829, 2023 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: 2022-045 Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department’s new subawards subject to FFATA reporting during the audit period. We determined: • 12 of 12 Opioid STR subawards were not reported, totaling $750,000 in obligations. • 7 of 7 Block Grants for Mental Health Services subawards were not reported, totaling $4.4 million in obligations. • 13 of 13 Block Grants for Substance Use Prevention, Treatment, and Recovery Services subawards were not reported, totaling $2.8 million in obligations. The department utilizes a spreadsheet to track and maintain subaward information needed to comply with FFATA reporting requirements. However, we found the tracking spreadsheet had not been updated to include information for the majority of new contracts initiated during state fiscal year 2024. Per management, FFATA reporting was not completed due to the FFATA Reporting Coordinator position being vacant since July 2024. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management strengthen existing controls to ensure all subawards are appropriately tracked and reported.
2024-010 Oregon Health Authority Submit required Federal Funding Accountability and Transparency Act reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.788 Opioid STR 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.788: H79TI085732, 2023; H79TI085732, 2024 93.958: B09SM086032, 2022; B09SM087383, 2023 93.959: B08TI084667, 2022; B08TI085829, 2023 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: 2022-045 Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department’s new subawards subject to FFATA reporting during the audit period. We determined: • 12 of 12 Opioid STR subawards were not reported, totaling $750,000 in obligations. • 7 of 7 Block Grants for Mental Health Services subawards were not reported, totaling $4.4 million in obligations. • 13 of 13 Block Grants for Substance Use Prevention, Treatment, and Recovery Services subawards were not reported, totaling $2.8 million in obligations. The department utilizes a spreadsheet to track and maintain subaward information needed to comply with FFATA reporting requirements. However, we found the tracking spreadsheet had not been updated to include information for the majority of new contracts initiated during state fiscal year 2024. Per management, FFATA reporting was not completed due to the FFATA Reporting Coordinator position being vacant since July 2024. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management strengthen existing controls to ensure all subawards are appropriately tracked and reported.
2024-010 Oregon Health Authority Submit required Federal Funding Accountability and Transparency Act reports Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.788 Opioid STR 93.958 Block Grants for Community Mental Health Services 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: 93.788: H79TI085732, 2023; H79TI085732, 2024 93.958: B09SM086032, 2022; B09SM087383, 2023 93.959: B08TI084667, 2022; B08TI085829, 2023 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: 2022-045 Questioned Costs: N/A Criteria: 2 CFR 170 Appendix A; 2 CFR 200.303 Federal regulations require recipients of federal awards to report certain subaward information in the Federal Funding Accountability and Transparency Act (FFATA) Subaward Reporting System for subawards meeting the criteria for reporting. Reports must be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. We identified and reviewed the reporting status of all the department’s new subawards subject to FFATA reporting during the audit period. We determined: • 12 of 12 Opioid STR subawards were not reported, totaling $750,000 in obligations. • 7 of 7 Block Grants for Mental Health Services subawards were not reported, totaling $4.4 million in obligations. • 13 of 13 Block Grants for Substance Use Prevention, Treatment, and Recovery Services subawards were not reported, totaling $2.8 million in obligations. The department utilizes a spreadsheet to track and maintain subaward information needed to comply with FFATA reporting requirements. However, we found the tracking spreadsheet had not been updated to include information for the majority of new contracts initiated during state fiscal year 2024. Per management, FFATA reporting was not completed due to the FFATA Reporting Coordinator position being vacant since July 2024. We recommend department management resume FFATA reporting as soon as feasible and ensure all necessary subawards are reported. We further recommend department management strengthen existing controls to ensure all subawards are appropriately tracked and reported.
2024-011 Oregon Health Authority Strengthen existing controls to ensure only those costs incurred during the period of performance are charged to the grant Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Award Numbers and Years: B08TI084667, 2022 Compliance Requirements: Period of Performance Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: $82,315 Criteria: 2 CFR 200.303; 42 USC 300x-62 Federal regulations provide for amounts awarded to the department be available for obligation and expenditure until the end of the fiscal year following the fiscal year for which the amounts were awarded. Federal regulations also require recipients of federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. During state fiscal year 2024, one grant award under the Block Grants for Substance Use Prevention, Treatment, and Recovery Services closed. The period of performance for this grant was October 1, 2021 through September 30, 2023. During the closeout process, the grant accountant reviews program expenditures recorded in the state accounting system and shifts expenditures incurred after the period of performance to a subsequent grant. During testing, we reviewed all grant expenditures recorded in the state accounting system after the period of performance. We found indirect expenditures for October and November 2023, totaling $82,315, had been charged to the closed grant. Upon inquiry, we learned the query used to identify transactions incurred after the period of performance was inadvertently filtered to identify only direct expenditures. As a result, some indirect expenditures were not identified in the query and were not appropriately moved to the subsequent grant. We recommend department management strengthen existing controls to ensure only those expenditures incurred during the period of performance are charged to the grant.
2024-017 Oregon Department of Human Services/Oregon Health Authority Strengthen internal controls over the ONE system Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777, 93.778 Medicaid Cluster Federal Award Numbers and Years: 2305OR5MAP, 2023; 2305OR5ADM, 2023; 2405OR5MAP, 2024; 2405OR05ADM, 2024 Compliance Requirements: Activities Allowed or Unallowed; Eligibility; Special Tests and Provisions Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 2 CFR 200.303(a); 42 CFR 95.621; Oregon Accounting Manual 10.60.00.PR We noted the agency had not obtained a System and Organization Controls (SOC) 2 Type II report over the Oregon Eligibility System (ONE system). The ONE system determines and verifies the eligibility of over 1.4 million Medicaid clients in Oregon, which leads to over $12.4 billion in Medicaid federal expenditures each year. The ONE system is owned by the department but administered by an external service provider. Because the ONE system is administered by an external vendor, best practices would include procedures to verify the internal controls at the external service provider are adequate to meet the business needs of the department. Such assurances are typically provided through a SOC 2 Type II report. A Type II report provides assurance about whether the controls are functioning and effective. During the fiscal year the department obtained a SOC 2 Type I report; however, the Type I report only identifies and evaluates the design of controls and does not conclude on the operating effectiveness of controls. As a result, the department does not have assurance over the operating effectiveness of controls at the external service provider, which may affect the eligibility and allowability of Medicaid expenditures. We recommend department management obtain an annual SOC 2 Type II report over the service organization’s internal controls for the ONE application or perform other alternative procedures to ensure internal controls over the ONE system at the external service provider are sufficient to meet the business needs of the Medicaid program.
2024-019 Oregon Department of Human Services Improve controls and compliance over long-term care facility audits Federal Awarding Agency: U.S. Department of Health and Human Services Assistance Listing Number and Name: 93.777, 93.778 Medicaid Cluster Federal Award Numbers and Years: 2305OR5MAP, 2023; 2305OR5ADM, 2023; 2405OR5MAP, 2024; 2405OR05ADM, 2024 Compliance Requirements: Special Tests and Provisions Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: N/A Questioned Costs: N/A Criteria: 42 CFR 435.10; OAR 411-070-0315; OAR 411-070-0359(s); 2 CFR 200.303(a) The Oregon Medicaid state plan requires each long-term care facility to submit annual financial statements reporting actual costs to the Department of Human Services (department). Each statement is subject to a desk audit by the department. Procedures performed by the department include, but are not limited to, verifying administrator payroll costs do not exceed the maximum amount and legal costs are only related to Medicaid resident services. We selected a random sample of 11 out of 107 long-term care facilities. We identified 9 facilities where we were unable to determine if the administrator compensation for the year was greater than the maximum allowable compensation. Administrator paid time off hours were reported on a separate line with all other administrative staff paid time off, and were not factored into the calculation. The department’s current template does not require these costs to be separated for the administrator. We also identified 2 facilities where immaterial legal costs were unsupported and not adjusted. Current guidance for unallowable costs does not clearly describe how immaterial differences should be addressed. Excess costs that exceed the maximum compensation limit or are unallowable may result in the facility’s cost per resident per day being incorrectly calculated. We recommend department management strengthen controls to ensure the long-term care facility’s total administrator compensation is clearly identified and does not exceed the maximum allowed, and that unallowable costs are adjusted in line with applicable guidance.