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.
2024-039 Oregon Department of Emergency Management Continue FFATA reporting improvements and make inquiries on FSRS functionality Federal Awarding Agency: U.S. Department of Homeland Security Assistance Listing Number and Name: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award Numbers and Years: FEMA-4258-DR-OR, 2016; FEMA-4296-DR-OR, 2017; FEMA-4432-DR-OR, 2019; FEMA-4452-DR-OR, 2019; FEMA-4499-DR-OR, 2020; FEMA-4519-DR-OR, 2020; FEMA-4562-DR-OR, 2020; FEMA-4599-DR-OR, 2021; FEMA-4768-DR-OR, 2024 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: 2023-033 Questioned Costs: N/A Criteria: 2 CFR 200.303(a)-(d); 2 CFR 170, Appendix A I(a) The Federal Funding Accountability and Transparency Act (FFATA) requires federal award recipients to submit key data elements for any subaward obligation that equals or exceeds $30,000 in the FFATA Subaward Reporting System (FSRS). Reports should be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Oregon Department of Emergency Management (department) reported the prior year FFATA finding as partially corrected. We judgmentally selected 10 of 383 subaward obligations for review. • We found eight were submitted with the applicable data elements but were not submitted timely, as based on guidance from FEMA the department was catching up with past due reports from the previous year. • We found one obligation was on the department’s tracking sheet, but support was not retained and FSRS did not show evidence of the submission. • We found one obligation to be among 30 for which the agency stated FSRS prevented them from entering. We recommend department management continue with its improvement on the timeliness of FFATA submissions and also make inquiries to the operators of FSRS regarding the inability to enter certain submissions.
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.
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.
2024-039 Oregon Department of Emergency Management Continue FFATA reporting improvements and make inquiries on FSRS functionality Federal Awarding Agency: U.S. Department of Homeland Security Assistance Listing Number and Name: 97.036 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award Numbers and Years: FEMA-4258-DR-OR, 2016; FEMA-4296-DR-OR, 2017; FEMA-4432-DR-OR, 2019; FEMA-4452-DR-OR, 2019; FEMA-4499-DR-OR, 2020; FEMA-4519-DR-OR, 2020; FEMA-4562-DR-OR, 2020; FEMA-4599-DR-OR, 2021; FEMA-4768-DR-OR, 2024 Compliance Requirements: Reporting Type of Finding: Significant Deficiency; Noncompliance Prior Year Findings: 2023-033 Questioned Costs: N/A Criteria: 2 CFR 200.303(a)-(d); 2 CFR 170, Appendix A I(a) The Federal Funding Accountability and Transparency Act (FFATA) requires federal award recipients to submit key data elements for any subaward obligation that equals or exceeds $30,000 in the FFATA Subaward Reporting System (FSRS). Reports should be submitted no later than the end of the month following the month in which the subawards were made. Federal regulations also require recipients to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. The Oregon Department of Emergency Management (department) reported the prior year FFATA finding as partially corrected. We judgmentally selected 10 of 383 subaward obligations for review. • We found eight were submitted with the applicable data elements but were not submitted timely, as based on guidance from FEMA the department was catching up with past due reports from the previous year. • We found one obligation was on the department’s tracking sheet, but support was not retained and FSRS did not show evidence of the submission. • We found one obligation to be among 30 for which the agency stated FSRS prevented them from entering. We recommend department management continue with its improvement on the timeliness of FFATA submissions and also make inquiries to the operators of FSRS regarding the inability to enter certain submissions.
FINDING 2024-001 - RISK ASSESSMENT PROCESS RELATED TO COMPLIANCE REQUIREMENTS Material Weakness Federal Programs: Education Stabilization Fund – Assistance Listing Number 84.425 Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-001. Criteria 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Organization must, among other things, “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 Unites States of the “Internal control Integrated Framework:, issued by the Committee of Sponsoring Organization of the Treadway Commission (COSO)”. Condition The Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. The Organization also implements the use of federal funds through different departments. Certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. Cause and Effect The material weakness resulted in the noncompliance findings described in items 2024-002 and 2024-003. Recommendation We recommend additional resources be allocated to federal award compliance to review federal award provisions and requirements, evaluate risks of noncompliance, and respond to such risks through internal controls. The process should include methods to identify and communicate changes to federal award requirements to all key individuals within the Organization and to verify internal controls are implemented correctly and are operating effectively. Views of Responsible Officials and Planned Corrective Actions The Organization’s Corrective Action Plan is included on pages 42 through 44.
Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws and regulations. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Condition and Context: The University did not have adequate controls relating to the reporting of expenditures on the SEFA for the Supplemental Nutrition Assistance Program Cluster (SNAP). The Sacramento campus confirmed with the Chancellor’s office that the final federal expenditures for the SNAP program in the current fiscal year were $6,206,313. It was determined subsequent to this notification that the actual federal expenditures for the SNAP program were $3,806,804. The University’s overall SEFA is compiled by the Chancellor’s office and relies on each campus to have internal controls that ensure completeness and accuracy of the SEFA. Cause and Effect: In discussing these conditions with the University, they stated the error was primarily due to not completing a final reconciliation and review of the SNAP federal expenditures before being provided to the Chancellor’s office. Additionally, management review controls at the campus over the completeness and accuracy of SEFA were not designed to detect the error. The inadequate review procedures over the SNAP federal expenditures resulted in an error on the SEFA for SNAP program expenditures in the amount of $2,399,509. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA may prevent the University from completing an audit in accordance with the timelines of Uniform Guidance.
Criteria: In accordance with 2 CFR 200 Subpart E, the University is required to conform to allowability of cost provisions, and 2 CFR 200.303 requires the organization to establish and maintain effective controls over federal awards. Allowable costs charged to federal programs, whether direct or indirect, must be allowable and be determined in accordance with Subpart E – Cost Principles of the Uniform Guidance. Effective internal controls should include procedures to ensure federal expenditures and amounts are for activities allowed or unallowed and allowable costs/cost principles, as well as accurately and completely reported on the SEFA. The Sacramento campus confirmed with the Chancellor’s office that the final federal expenditures for the SNAP Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws and regulations. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. According to 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i)Be supported by a system of internal control that providesreasonable assurance that the charges are accurate, allowable,and properly allocated; (ii)Be incorporated into the official records of the recipient orsubrecipient; (iii)Reasonably reflect the total activity for which the employee iscompensated by the recipient or subrecipient, not exceeding 100percent of compensated activities; (iv)Encompass federally-assisted and all other activities compensatedby the recipient or subrecipient on an integrated basis but mayinclude the use of subsidiary records as defined in the recipient's orsubrecipient's written policy; (v)Comply with the established accounting policies and procedures ofthe recipient or subrecipient and (vi)Support the distribution of the employee's salary or wages amongspecific activities or cost objectives if the employee works on morethan one Federal award; a Federal award and non-Federal award;an indirect cost activity and a direct cost activity; two or moreindirect activities allocated using different allocation bases; or anunallowable activity and a direct or indirect cost activity. Cause and Effect: The University receives Supplemental Nutrition Assistance Program (SNAP) Cluster program funding at its Sacramento campus to perform nutrition outreach and education services to residents of the State of California. The Sacramento campus administers the SNAP Cluster nutrition education programs through its College of Continuing Education (CCE) and Population Research Center (PRC) offices. SNAP Cluster program expenditures are primarily comprised of payroll for program personnel performing various program activities and related fringe benefits and indirect costs. During our testing of 2 payroll expenditures for CCE employees (totaling $7,101) and 4 payroll expenditures for PRC employees (totaling $6,285), we noted effort reports detailing 100% of the employee's activities were not prepared for certain employees. Upon further investigation and discussion with CCE and PRC program management, we noted effort reports were not prepared for any employees whose payroll expenditures were charged to the SNAP Cluster program. The payroll expenditures and related costs impacted by the inadequate effort reports, are described in the table below: Expenditure category Questioned costs Excerpt of total SNAP Cluster program expenditures by impacted expenditure category Payroll $1,544,086 $1,544,086 Fringe benefits $708,935 $708,935 Indirect costs $563,225 $735,693 Total $2,816,276 $2,988,714 Total SNAP Cluster program expenditures were $4,267,405 for the year ended June 30, 2024. We noted additional instances of noncompliance as follows: • In our testing of 6 payroll expenditures, the hourly payroll ratesused to prepare the quarterly payroll remittances submitted to theState of California exceeded the actual payroll rates paid for 2employees resulting in an overcharge of payroll, fringe benefits,and indirect costs to the SNAP program of $2,880, $1,152 and$1,008, respectively. As these 2 employees did not have effortreports as discussed above, payroll, fringe benefits, and indirectcosts associated with these 2 employees has already beenincluded in the table above. In addition, we noted the Sacramento campus has not established adequate internal controls to ensure: (1) payroll expenditures charged to the SNAP Cluster program are properly determined and supported in accordance with the requirements of the Uniform Guidance and (2) fringe benefit and indirect costs are properly calculated by applying the approved fringe or indirect cost rate to a base that includes only allowable costs. Cause and Effect: The errors noted above were primarily due to insufficient controls over the establishment and tracking of SNAP Cluster program activities as federal funding within Sacramento’s general ledger. As a result, a portion of SNAP program expenditures and activities were not processed in accordance with applicable federal guidelines. Additional errors noted above relate to insufficient controls over the accuracy of the payroll, fringe benefits, and indirect cost charged to the SNAP Cluster program. The inadequate review procedures over payroll, fringe benefits, and indirect cost expenditures resulted in unallowable charges to the SNAP Cluster program in the amount of $2,816,276.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-002 (2023-002) – INACCURATE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards Funding Agency: All (see Schedule of Expenditures of Federal Awards) Title: All (see Schedule of Expenditures of Federal Awards) AL #: All (see Schedule of Expenditures of Federal Awards) Award #: All (see Schedule of Expenditures of Federal Awards) Award Period: All (see Schedule of Expenditures of Federal Awards) Questioned Costs: None Statement of Condition The Schedule of Expenditures of Federal Awards (SEFA) was provided timely to the auditors; however, several adjustments were identified during the audit process: • Adjustments were required to properly record accruals and present expenditures on the modified accrual basis, resulting in a reduction of expenditures by $140,941. • The SEFA incorrectly included state-funded expenditures, requiring an adjustment that reduced reported federal expenditures by $50,766. • A disbursement related to the Local Assistance & Tribal Consistency Fund grant was initially posted incorrectly (reversed) in the general ledger. Correcting this error resulted in an increase in reported federal expenditures by $1,000,509. Without accurate recording of federal award expenditures, auditors cannot appropriately assess and select federal programs for testing as mandated by the Single Audit Act. Moreover, insufficient internal controls increase the risk of noncompliance and potential disallowed federal expenditures. Management’s Progress Toward Prior Year Corrective Action Plan: The County has made progress toward addressing the prior year’s SEFA accuracy finding; however, additional corrections remain necessary, as noted above. Criteria 2 CFR § 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program requirements. Good internal control practices require the entity to have documented procedures for: • Properly identifying federal, state, and other funding sources. • Classifying expenditures accurately under the correct federal assistance listing numbers. • Ensuring expenditures reported on the SEFA are accurate and presented according to requirements. Additionally, 2 CFR 200.510(b) mandates the preparation of an accurate and complete SEFA for the audit period, including federal expenditures as determined in accordance with 2 CFR 200.502. Cause The County lacks comprehensive controls to ensure that all federal expenditures are correctly tracked, accurately classified, and properly reported on the SEFA. Effect Without accurate, timely tracking and reporting of federal expenditures, the County is at risk of improperly accounting for federal awards, potentially leading to noncompliance, questioned costs, or repayment obligations. Recommendation We recommend that the County establish, document, and implement a comprehensive internal control structure specifically designed to: • Clearly identify, track, and report grant expenditures. • Accurately distinguish between federal and non-federal expenditures. • Prepare and review the SEFA regularly to ensure completeness, accuracy, and compliance with modified accrual accounting requirements.
2024-007 (2023-012) – EQUIPMENT AND REAL PROPERTY MANAGEMENT Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards and (G) Instance of Non-compliance related to Federal Awards Funding Agency: U.S. Department of Transportation Title: Airport Improvement Program AL #: 20.106 Award #: 3-35-0039-031-2024, 3-35-0039-027-2022, 3-35-0039-028-2022, 3-35-0039-029-2023 Award Period: May 1, 2024 – January 1, 2025, December 13, 2021 – December 13, 2025, June 24, 2022 – June 24, 2026, July 3, 2023 – July 7, 2027 Questioned Costs: None Statement of Condition The County was not able to provide a complete and accurate equipment listing tracking items purchased with federal funding nor did the County conduct a physical inventory identifying federal assets. Management’s Progress Toward Prior Year Corrective Action Plan: There was no progress made in the year ended June 30, 2024. Criteria Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. Cause The County is not following policy and procedures to ensure that equipment purchased with federal funds is maintained and tracked and the County performing a physical inventory at a minimum of every two years. Effect The County could dispose of or lose federally funded equipment without following federal guidelines. Recommendation The auditor recommends the County enhance the design of its control activities and policies and procedures should be developed to ensure physical inventories are taken at least once every two years and that the County creates a tool to assist in tracking and maintaining equipment purchased with federal funds.
2024-007 (2023-012) – EQUIPMENT AND REAL PROPERTY MANAGEMENT Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards and (G) Instance of Non-compliance related to Federal Awards Funding Agency: U.S. Department of Transportation Title: Airport Improvement Program AL #: 20.106 Award #: 3-35-0039-031-2024, 3-35-0039-027-2022, 3-35-0039-028-2022, 3-35-0039-029-2023 Award Period: May 1, 2024 – January 1, 2025, December 13, 2021 – December 13, 2025, June 24, 2022 – June 24, 2026, July 3, 2023 – July 7, 2027 Questioned Costs: None Statement of Condition The County was not able to provide a complete and accurate equipment listing tracking items purchased with federal funding nor did the County conduct a physical inventory identifying federal assets. Management’s Progress Toward Prior Year Corrective Action Plan: There was no progress made in the year ended June 30, 2024. Criteria Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. Cause The County is not following policy and procedures to ensure that equipment purchased with federal funds is maintained and tracked and the County performing a physical inventory at a minimum of every two years. Effect The County could dispose of or lose federally funded equipment without following federal guidelines. Recommendation The auditor recommends the County enhance the design of its control activities and policies and procedures should be developed to ensure physical inventories are taken at least once every two years and that the County creates a tool to assist in tracking and maintaining equipment purchased with federal funds.
2024-007 (2023-012) – EQUIPMENT AND REAL PROPERTY MANAGEMENT Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards and (G) Instance of Non-compliance related to Federal Awards Funding Agency: U.S. Department of Transportation Title: Airport Improvement Program AL #: 20.106 Award #: 3-35-0039-031-2024, 3-35-0039-027-2022, 3-35-0039-028-2022, 3-35-0039-029-2023 Award Period: May 1, 2024 – January 1, 2025, December 13, 2021 – December 13, 2025, June 24, 2022 – June 24, 2026, July 3, 2023 – July 7, 2027 Questioned Costs: None Statement of Condition The County was not able to provide a complete and accurate equipment listing tracking items purchased with federal funding nor did the County conduct a physical inventory identifying federal assets. Management’s Progress Toward Prior Year Corrective Action Plan: There was no progress made in the year ended June 30, 2024. Criteria Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. Cause The County is not following policy and procedures to ensure that equipment purchased with federal funds is maintained and tracked and the County performing a physical inventory at a minimum of every two years. Effect The County could dispose of or lose federally funded equipment without following federal guidelines. Recommendation The auditor recommends the County enhance the design of its control activities and policies and procedures should be developed to ensure physical inventories are taken at least once every two years and that the County creates a tool to assist in tracking and maintaining equipment purchased with federal funds.
2024-007 (2023-012) – EQUIPMENT AND REAL PROPERTY MANAGEMENT Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards and (G) Instance of Non-compliance related to Federal Awards Funding Agency: U.S. Department of Transportation Title: Airport Improvement Program AL #: 20.106 Award #: 3-35-0039-031-2024, 3-35-0039-027-2022, 3-35-0039-028-2022, 3-35-0039-029-2023 Award Period: May 1, 2024 – January 1, 2025, December 13, 2021 – December 13, 2025, June 24, 2022 – June 24, 2026, July 3, 2023 – July 7, 2027 Questioned Costs: None Statement of Condition The County was not able to provide a complete and accurate equipment listing tracking items purchased with federal funding nor did the County conduct a physical inventory identifying federal assets. Management’s Progress Toward Prior Year Corrective Action Plan: There was no progress made in the year ended June 30, 2024. Criteria Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. Cause The County is not following policy and procedures to ensure that equipment purchased with federal funds is maintained and tracked and the County performing a physical inventory at a minimum of every two years. Effect The County could dispose of or lose federally funded equipment without following federal guidelines. Recommendation The auditor recommends the County enhance the design of its control activities and policies and procedures should be developed to ensure physical inventories are taken at least once every two years and that the County creates a tool to assist in tracking and maintaining equipment purchased with federal funds.
Finding Number: 2024-002 Federal Program: Education Stabilization Fund: COVID-19 – ARP ESSER Federal Award Identification Number and Year: N/A, 2023 and 2024 Assistance Listing Number (ALN): 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Allowable Activities, Allowable Costs/Cost Principles Pass-through Entity: Ohio Department of Education and Workforce Repeat Finding: No Significant Deficiency and Noncompliance Criteria: Federal regulation (2 CFR 200.303(a)) requires that non-federal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The School had unallowable activities and unallowable costs charged to the grant related to sales tax, of which the School is tax exempt. Questioned Costs: Total of $18,753. Identification of How Questioned Costs Were Computed: Total known questioned costs of $4,332, and total projection of $14,421 for a total of $18,753. Context: In testing ARP ESSER nonpayroll costs, it was noted that the School charged a vendor quote to the grant, which included sales tax of $3,834, instead of charging the actual invoice amount paid to the vendor. For another testing selection, there was also an additional $498 of sales tax charged to the grant. Cause and Effect: The School did not have internal controls in place to ensure that only allowable costs are charged to federal grants. As a result, the School charged unallowable expenses to the grant. Recommendation: We recommend the School review the federal award allowable uses and implement a process to ensure that costs are allowable prior to payment. Failure to comply with the federal award allowable uses could lead to noncompliance and future questioned costs. Views of Responsible Officials: See the Corrective Action Plan.
Finding Number: 2024-002 Federal Program: Education Stabilization Fund: COVID-19 – ARP ESSER Federal Award Identification Number and Year: N/A, 2023 and 2024 Assistance Listing Number (ALN): 84.425U Federal Awarding Agency: U.S. Department of Education Compliance Requirement: Allowable Activities, Allowable Costs/Cost Principles Pass-through Entity: Ohio Department of Education and Workforce Repeat Finding: No Significant Deficiency and Noncompliance Criteria: Federal regulation (2 CFR 200.303(a)) requires that non-federal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The School had unallowable activities and unallowable costs charged to the grant related to sales tax, of which the School is tax exempt. Questioned Costs: Total of $18,753. Identification of How Questioned Costs Were Computed: Total known questioned costs of $4,332, and total projection of $14,421 for a total of $18,753. Context: In testing ARP ESSER nonpayroll costs, it was noted that the School charged a vendor quote to the grant, which included sales tax of $3,834, instead of charging the actual invoice amount paid to the vendor. For another testing selection, there was also an additional $498 of sales tax charged to the grant. Cause and Effect: The School did not have internal controls in place to ensure that only allowable costs are charged to federal grants. As a result, the School charged unallowable expenses to the grant. Recommendation: We recommend the School review the federal award allowable uses and implement a process to ensure that costs are allowable prior to payment. Failure to comply with the federal award allowable uses could lead to noncompliance and future questioned costs. Views of Responsible Officials: See the Corrective Action Plan.
2024-014 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: None AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – Nutritional School Lunch Program 10.556 – Special Milk Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Award Numbers: 225GA324N1099 (Year: 2022), 225GA324N1199 (Year: 2022), 235GA324N1099 (Year: 2023), 235GA324N1199 (Year: 2023), 235GA323N8903 (Year: 2023), 235GA324L1603 (Year: 2023), 245GA324N1099 (Year: 2024), 245GA324N1199 (Year: 2024), 245GA324L1603 (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Finding: 2023-012 Description: The Georgia Department of Education should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and schools and encourages the domestic consumption of nutritious agricultural commodities. Funds associated with the CNC program are provided to the Georgia Department of Education (GaDOE) for allocation to eligible subrecipients. Because the GaDOE subgrants program funds to various entities, the GaDOE must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. Criteria: As a recipient of federal awards, the GaDOE is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the GaDOE, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our examination of reporting requirements associated with CNC revealed that the GaDOE failed to submit subaward data to the FSRS. Therefore, all first-tier subawards of $30,000 or more, and the associated subaward data, was not reflected on the USASpending.gov website as required. Cause: The GaDOE had established procedures in place to comply with the FFATA reporting requirements for federal awards, but the GaDOE ceased FFATA reporting when it was removed from the Office of Management and Budget (OMB) Compliance Supplement in anticipation of the transition to the proposed new federal reporting model. When FFATA reporting reappeared on the OMB Compliance Supplement, the GaDOE reinstated FFATA reporting procedures for all federal programs and hired a new staff member in June 2022 to solely assist with bringing all FFATA reporting up to date for all federal programs. However, reporting for CNC proved to be challenging due to the continuously changing award amounts based on the number of claims each month. The GaDOE submitted a request to the USDA to report FFATA information on an annual basis, but that request was denied. Therefore, the GaDOE is currently formulating a method that will allow for compliance with CNC FFATA monthly reporting requirements in a more efficient manner. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review expenditure data associated with the State of Georgia’s CNC programs. Recommendation: We recommend that the GaDOE: • Finalize processes and procedures associated with the CNC FFATA reporting requirements; • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: We concur with this finding.
2024-014 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: None AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – Nutritional School Lunch Program 10.556 – Special Milk Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Award Numbers: 225GA324N1099 (Year: 2022), 225GA324N1199 (Year: 2022), 235GA324N1099 (Year: 2023), 235GA324N1199 (Year: 2023), 235GA323N8903 (Year: 2023), 235GA324L1603 (Year: 2023), 245GA324N1099 (Year: 2024), 245GA324N1199 (Year: 2024), 245GA324L1603 (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Finding: 2023-012 Description: The Georgia Department of Education should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and schools and encourages the domestic consumption of nutritious agricultural commodities. Funds associated with the CNC program are provided to the Georgia Department of Education (GaDOE) for allocation to eligible subrecipients. Because the GaDOE subgrants program funds to various entities, the GaDOE must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. Criteria: As a recipient of federal awards, the GaDOE is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the GaDOE, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our examination of reporting requirements associated with CNC revealed that the GaDOE failed to submit subaward data to the FSRS. Therefore, all first-tier subawards of $30,000 or more, and the associated subaward data, was not reflected on the USASpending.gov website as required. Cause: The GaDOE had established procedures in place to comply with the FFATA reporting requirements for federal awards, but the GaDOE ceased FFATA reporting when it was removed from the Office of Management and Budget (OMB) Compliance Supplement in anticipation of the transition to the proposed new federal reporting model. When FFATA reporting reappeared on the OMB Compliance Supplement, the GaDOE reinstated FFATA reporting procedures for all federal programs and hired a new staff member in June 2022 to solely assist with bringing all FFATA reporting up to date for all federal programs. However, reporting for CNC proved to be challenging due to the continuously changing award amounts based on the number of claims each month. The GaDOE submitted a request to the USDA to report FFATA information on an annual basis, but that request was denied. Therefore, the GaDOE is currently formulating a method that will allow for compliance with CNC FFATA monthly reporting requirements in a more efficient manner. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review expenditure data associated with the State of Georgia’s CNC programs. Recommendation: We recommend that the GaDOE: • Finalize processes and procedures associated with the CNC FFATA reporting requirements; • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: We concur with this finding.
2024-014 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: None AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – Nutritional School Lunch Program 10.556 – Special Milk Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Award Numbers: 225GA324N1099 (Year: 2022), 225GA324N1199 (Year: 2022), 235GA324N1099 (Year: 2023), 235GA324N1199 (Year: 2023), 235GA323N8903 (Year: 2023), 235GA324L1603 (Year: 2023), 245GA324N1099 (Year: 2024), 245GA324N1199 (Year: 2024), 245GA324L1603 (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Finding: 2023-012 Description: The Georgia Department of Education should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and schools and encourages the domestic consumption of nutritious agricultural commodities. Funds associated with the CNC program are provided to the Georgia Department of Education (GaDOE) for allocation to eligible subrecipients. Because the GaDOE subgrants program funds to various entities, the GaDOE must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. Criteria: As a recipient of federal awards, the GaDOE is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the GaDOE, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our examination of reporting requirements associated with CNC revealed that the GaDOE failed to submit subaward data to the FSRS. Therefore, all first-tier subawards of $30,000 or more, and the associated subaward data, was not reflected on the USASpending.gov website as required. Cause: The GaDOE had established procedures in place to comply with the FFATA reporting requirements for federal awards, but the GaDOE ceased FFATA reporting when it was removed from the Office of Management and Budget (OMB) Compliance Supplement in anticipation of the transition to the proposed new federal reporting model. When FFATA reporting reappeared on the OMB Compliance Supplement, the GaDOE reinstated FFATA reporting procedures for all federal programs and hired a new staff member in June 2022 to solely assist with bringing all FFATA reporting up to date for all federal programs. However, reporting for CNC proved to be challenging due to the continuously changing award amounts based on the number of claims each month. The GaDOE submitted a request to the USDA to report FFATA information on an annual basis, but that request was denied. Therefore, the GaDOE is currently formulating a method that will allow for compliance with CNC FFATA monthly reporting requirements in a more efficient manner. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review expenditure data associated with the State of Georgia’s CNC programs. Recommendation: We recommend that the GaDOE: • Finalize processes and procedures associated with the CNC FFATA reporting requirements; • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: We concur with this finding.
2024-014 Improve Controls over Transparency Act Reporting Compliance Requirement: Reporting Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: None AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – Nutritional School Lunch Program 10.556 – Special Milk Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Award Numbers: 225GA324N1099 (Year: 2022), 225GA324N1199 (Year: 2022), 235GA324N1099 (Year: 2023), 235GA324N1199 (Year: 2023), 235GA323N8903 (Year: 2023), 235GA324L1603 (Year: 2023), 245GA324N1099 (Year: 2024), 245GA324N1199 (Year: 2024), 245GA324L1603 (Year: 2024) Questioned Costs: None Identified Repeat of Prior Year Finding: 2023-012 Description: The Georgia Department of Education should improve internal controls to ensure that subaward information associated with the Federal Funding Accountability and Transparency Act is reported appropriately and timely. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential child care institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and schools and encourages the domestic consumption of nutritious agricultural commodities. Funds associated with the CNC program are provided to the Georgia Department of Education (GaDOE) for allocation to eligible subrecipients. Because the GaDOE subgrants program funds to various entities, the GaDOE must comply with the Federal Funding Accountability and Transparency Act of 2006 (FFATA). The FFATA requirements were signed into law on September 26, 2006 in an effort to give the American public access to information on how their tax dollars are being spent. Criteria: As a recipient of federal awards, the GaDOE is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Under the FFATA (Public Law 109-282), as codified in Title 2 CFR Part 170, Reporting Subaward and Executive Compensation Information, recipients of grants or cooperative agreements, including the GaDOE, who make first-tier subawards of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Subaward data, such as the subaward date, subawardee Unique Entity Identifier number, amount of subaward, subaward obligation/action date, date of report submission, and subaward number, are submitted through the FSRS and accessible to the general public through the USASpending.gov website. Condition: Our examination of reporting requirements associated with CNC revealed that the GaDOE failed to submit subaward data to the FSRS. Therefore, all first-tier subawards of $30,000 or more, and the associated subaward data, was not reflected on the USASpending.gov website as required. Cause: The GaDOE had established procedures in place to comply with the FFATA reporting requirements for federal awards, but the GaDOE ceased FFATA reporting when it was removed from the Office of Management and Budget (OMB) Compliance Supplement in anticipation of the transition to the proposed new federal reporting model. When FFATA reporting reappeared on the OMB Compliance Supplement, the GaDOE reinstated FFATA reporting procedures for all federal programs and hired a new staff member in June 2022 to solely assist with bringing all FFATA reporting up to date for all federal programs. However, reporting for CNC proved to be challenging due to the continuously changing award amounts based on the number of claims each month. The GaDOE submitted a request to the USDA to report FFATA information on an annual basis, but that request was denied. Therefore, the GaDOE is currently formulating a method that will allow for compliance with CNC FFATA monthly reporting requirements in a more efficient manner. Effect: The deficiencies noted in the FFATA reporting process resulted in noncompliance with federal regulations. Without effective controls in place to ensure compliance with federal reporting requirements, the transparency objective associated with the FFATA requirements was not achieved as the general public was unable to review expenditure data associated with the State of Georgia’s CNC programs. Recommendation: We recommend that the GaDOE: • Finalize processes and procedures associated with the CNC FFATA reporting requirements; • Incorporate additional oversight, training, and/or staff to aid in the identification of subawards to be reported and the reporting of appropriate data elements, as applicable, in a timely manner; and • Maintain documentation of subaward agreements and the determination of whether each subaward should be entered into the FSRS in compliance with the FFATA reporting requirements. Views of Responsible Officials: We concur with this finding.