2024-002 Improve Internal Controls Over Reporting Federal Program(s) Information Federal Agency: Department of the Treasury Award Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires the City to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. Per U.S. Department of the Treasury’s Coronavirus State and Local Fiscal Recovery Funds: Compliance and Reporting Guidance, recipients are required to accurately report project-level information, including the breakdown of expenditures by individual project, and to avoid duplicative or misclassified reporting of expenditures across reporting periods. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Condition and Context During our audit, it was determined that the City prepared and submitted its annual performance and evaluation report to Treasury within the required timeline. However, the City did not break out expenditures by individual project, as required. Instead, the City created a new project each year and classified all expenditures for that year under the new project, rather than reporting them by individual project. As a result, the City continued to report prior period expenditures as current period expenditures, resulting in $2,203,825 reported as current period expenditures that were not actually incurred during the current period. Cause The City’s internal controls over federal award reporting did not ensure expenditures were accurately reported by project or presented in accordance with Treasury guidelines. Effect or Potential Effect Inaccurate reporting of project-level and current period expenditure information increases the risk of noncompliance with federal reporting requirements and impairs the transparency and oversight expected by the Treasury. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The City should strengthen its internal controls over federal award reporting. This should include procedures to ensure project-level expenditures are correctly identified, reported under the appropriate projects, and only current period expenditures are included as such in the performance and evaluation report. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-002 Improve Internal Controls Over Reporting Federal Program(s) Information Federal Agency: Department of the Treasury Award Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires the City to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. Per U.S. Department of the Treasury’s Coronavirus State and Local Fiscal Recovery Funds: Compliance and Reporting Guidance, recipients are required to accurately report project-level information, including the breakdown of expenditures by individual project, and to avoid duplicative or misclassified reporting of expenditures across reporting periods. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Condition and Context During our audit, it was determined that the City prepared and submitted its annual performance and evaluation report to Treasury within the required timeline. However, the City did not break out expenditures by individual project, as required. Instead, the City created a new project each year and classified all expenditures for that year under the new project, rather than reporting them by individual project. As a result, the City continued to report prior period expenditures as current period expenditures, resulting in $2,203,825 reported as current period expenditures that were not actually incurred during the current period. Cause The City’s internal controls over federal award reporting did not ensure expenditures were accurately reported by project or presented in accordance with Treasury guidelines. Effect or Potential Effect Inaccurate reporting of project-level and current period expenditure information increases the risk of noncompliance with federal reporting requirements and impairs the transparency and oversight expected by the Treasury. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The City should strengthen its internal controls over federal award reporting. This should include procedures to ensure project-level expenditures are correctly identified, reported under the appropriate projects, and only current period expenditures are included as such in the performance and evaluation report. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
2024-002 Improve Internal Controls Over Reporting Federal Program(s) Information Federal Agency: Department of the Treasury Award Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: 2024 Compliance Requirement: Reporting Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement 2 CFR 200.303 requires the City to establish and maintain effective internal controls over federal awards to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. Per U.S. Department of the Treasury’s Coronavirus State and Local Fiscal Recovery Funds: Compliance and Reporting Guidance, recipients are required to accurately report project-level information, including the breakdown of expenditures by individual project, and to avoid duplicative or misclassified reporting of expenditures across reporting periods. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Condition and Context During our audit, it was determined that the City prepared and submitted its annual performance and evaluation report to Treasury within the required timeline. However, the City did not break out expenditures by individual project, as required. Instead, the City created a new project each year and classified all expenditures for that year under the new project, rather than reporting them by individual project. As a result, the City continued to report prior period expenditures as current period expenditures, resulting in $2,203,825 reported as current period expenditures that were not actually incurred during the current period. Cause The City’s internal controls over federal award reporting did not ensure expenditures were accurately reported by project or presented in accordance with Treasury guidelines. Effect or Potential Effect Inaccurate reporting of project-level and current period expenditure information increases the risk of noncompliance with federal reporting requirements and impairs the transparency and oversight expected by the Treasury. No questioned costs are reported as the requirement is procedural in nature and costs reported were ultimately deemed allowable. Recommendation The City should strengthen its internal controls over federal award reporting. This should include procedures to ensure project-level expenditures are correctly identified, reported under the appropriate projects, and only current period expenditures are included as such in the performance and evaluation report. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal awards that provides assurance that the entity is managing the federal awards in compliance with federal statues, regulation and conditions of the federal awards. Condition and Context: Accounting tasks such as review and approval of cost reimbursements play a key role in proving the accuracy of accounting data and information included in SEFA. During the audit, we noted various incidences in which required second approvals for cost reimbursements were not completed in accordance with the Organization’s approval procedures. Questioned Costs: None noted Effect: Costs could be charged to federal programs which are unallowed due to lack of review. Cause: The Organization experienced significant turnover in the accounting department during 2024. As a result, well-defined accounting policies and procedures have not been established and many review and approval policies and procedures have not been consistently or continuously maintained. Recommendation: We recommend that the Organization implement enhanced internal controls over the review and approval of cost reimbursement forms prior to submission, in order to prevent errors and ensure accuracy. The responsibility for reviewing and approving these forms should be clearly segregated from the individual responsible for recording the related journal entries, to maintain proper separation of duties and strengthen the overall control environment.
Prior Year Finding: 2023-005 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2023 - 6/30/2024) Compliance Requirement: Suspension and Debarment Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Control: Per 2 CFR section 200.303(a), a non-federal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per 2 CFR section 200.214 Suspension and Debarment restricts awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Per 2 CFR section 180.300 states that an entity may determine suspension and debarment status by: (a) Checking SAM Exclusion; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person. Condition/Context: The suspension and debarment status of five out of five vendors with expenditures exceeding $25,000 was not verified as required by federal regulation. Questioned Costs: There are no questioned costs related to this finding as the vendors were not federally suspended or debarred. Cause: The Towns internal controls were not sufficient to ensure federal suspension and debarment regulations were followed for purchases made for the program. Effect: Failure to adhere to suspension and debarment requirements may result in the Town entering into a contract or purchase with a vendor that is suspended or debarred and not authorized to provide goods and services to the program. Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.
Prior Year Finding: 2023-004 Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2023 6/30/2024) Compliance Requirement: Procurement Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Control: Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: Per 2 CFR section 200.318, a non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. Per 2 CFR section 200.319, all procurement transactions for the acquisition of property or services required under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and § 200.320. Per the Towns purchasing policy, goods or services costing $10,000 or more must be purchased from the lowest responsive bidder meeting specifications after advertising for bids. Condition/Context: The Town failed to provide documentation supporting compliance with required procurement processes for goods or services exceeding $10,000 for five out of five vendors tested. This includes a lack of evidence on how these vendors were selected and whether the procurement process ensured full and open competition. Questioned Costs: Unknown. Cause: The Town's internal controls were not sufficient to ensure that procurement policies were followed for purchases made for the program. Effect: Failure to adhere to procurement policies and procedures may result in obtaining goods or services under terms that are not in the best interest of the federal program. Recommendation: We recommend that the Town enhance its procedures and internal controls to ensure that it verifies vendors are not suspended or debarred from business prior to all goods and services charged to the program. The Town should retain documentation of procurement suspension/debarment status verifications for its vendors audit purposes. Views of Responsible Officials: Management agrees with the finding.
Federal Agency: U.S. Department of Treasury Federal Program: COVID 19 Coronavirus State and Local Fiscal Relief Fund Assistance Listing: 21.027 Pass-Through Entity: Maryland Department of Housing and Community Development Pass-Through Award Number and Period: (7/1/2023 - 6/30/2024) Compliance Requirement: Allowable Activities/Costs Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in "Standards for Internal Control in the Federal GovernmenT" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: The 2 CFR Part 200, Subpart E is applicable to expenditures under SLFRF unless stated otherwise. Given the purpose and very broad scope of eligible uses of the revenue replacement funds, only a subset of the requirements in 2 CFR Part 200, Subpart E apply to recipients use of such funds, as follows: 2 CFR 200.400(a) - (c), and (e) Policy guide; 200.403(a), (c), (d), (g), and (h) Factors affecting allowability of costs; and 200.404(e) Reasonable costs. Condition: The Town didnt maintain adequate documentation (i.e. invoices) to support the existence, allowability and approval of CSLFRF funds used to support programmatic costs. Context: The Town failed to provide supporting documentation to auditors for 16 out of 60 expenditures tested. Therefore, we could not determine if costs were allowable under the program. In addition, the town failed to provide supporting documentation for the review and approval of 24 out of 60 expenditures tested. Questioned Costs: $102,612. Cause: The Town transferred the funds to the grant in the accounting system but failed to maintain an audit trail to document the allowability and approval for the use of federal funds. Effect: Auditors were unable to verify the Towns compliance with program requirements. Recommendation: The Town should evaluate its current policies, implement proper controls, and perform additional training to ensure that, prior to charging costs to the program adequate documentation exists and maintained to support those costs, they are reviewed by a supervisor who is knowledgeable of the regulations regarding allowable program costs and that documentation of review is maintained. Views of Responsible Officials: Management agrees with the finding.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Information on the Federal Programs: United States Department of Education, both programs are passed through Massachusetts Department of Elementary and Secondary Education CFDA Nos. 84.027 & 84.173; Special Education Cluster; Grant Period Ending Fiscal Year End 2024 CFDA Nos. 84.425 & 84.425D; ESSER Program; Grant Period Ending Fiscal Year End 2024 Condition: In the course of allowable costs and procurement testing (B-010), it was discovered that the client failed to check vendors for suspension/debarment prior to contracting; note I-002 email from client. Client does have appropriate policies/procedures in place for managing Federal awards, including this particular criteria; see Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards, however they were not being followed. Criteria: Non-Federal entities are required to follow procurement standards per 2 CFR sections 200.303 and 200.318-326, Uniform Guidance, as well as their own documented procurement standards, which must reflect applicable state and local laws and regulations – whichever is stricter. Per 2 CFR 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). UG §200.318 General procurement standards. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR Section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR Part 180 identifies two types of covered transactions: a transaction at the primary tier versus a transaction at the lower tier. A covered transaction at the primary tier is any transaction between a Federal agency and a person. A person can be an individual or business, federal agency or non-federal agency. A covered transaction at the lower tier is where a participant, such as a non-federal entity, in a covered transaction does business with another person. A “covered transaction” can be further defined as a non-procurement transaction or procurement transaction. A subaward, regardless of amount, qualifies as a non-procurement transaction, unless exempt by 2 CFR Part 180.215. A procurement transaction for goods or services that equals or exceeds $25,000 qualifies as a covered transaction, unless other criteria is met within 2 CFR Part 180.220. For example, a procurement transaction could be a covered transaction, regardless of amount, if the transaction requires approval by a Federal agency. Cause: Excerpt from client Policies & Procedures, MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension (p. 28) The District awards contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement. Consideration will be given to such matters as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources. The District may not subcontract with or award sub grants to any person or company who is debarred or suspended. For all contracts over $25,000 the District verifies that the vendor with whom the District intends to do business with is not excluded or disqualified. 2 C.F.R. Part 200, Appendix II (1) and 2 C.F.R. §§ 180.220 and 180.300. In this case, therefore, the proper control was in place but not followed. Effect or Possible Effect of the Condition: Non-compliance with 2 CFR 200 Section 180.995. Questioned Costs: Not applicable. Isolated Instance or Systemic Problem: This appears to be an isolated problem as the controls over this compliance requirement are in place but were not being followed. Repeat of a Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): No Recommendation to Prevent Future Occurrence: It is recommended that the Town follow scrupulously its own MPS Grant Manual – Policies Over Federal Awards: Debarment and Suspension, which is fully compliant with 2 CFR 200 Uniform Guidance.
Finding 2024.003: Cash Management - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Substance Abuse and Mental Health Services Projects of Regional and National Significance Certified Community Behavioral Health Clinic Expansion Grants Federal Assistance Listing Number: 93.243 and 93.696 Federal Award Identification Number and Year: H79SM087223 - 2024, H79SM086969 - 2024 Criteria In accordance with §200.305, federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None Context We selected seven drawdowns for testing of cash management relating to these major programs. We noted there was no formal approval or evidence of review for these drawdowns Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2024.003: Cash Management - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Substance Abuse and Mental Health Services Projects of Regional and National Significance Certified Community Behavioral Health Clinic Expansion Grants Federal Assistance Listing Number: 93.243 and 93.696 Federal Award Identification Number and Year: H79SM087223 - 2024, H79SM086969 - 2024 Criteria In accordance with §200.305, federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None Context We selected seven drawdowns for testing of cash management relating to these major programs. We noted there was no formal approval or evidence of review for these drawdowns Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2024.003: Cash Management - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Substance Abuse and Mental Health Services Projects of Regional and National Significance Certified Community Behavioral Health Clinic Expansion Grants Federal Assistance Listing Number: 93.243 and 93.696 Federal Award Identification Number and Year: H79SM087223 - 2024, H79SM086969 - 2024 Criteria In accordance with §200.305, federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None Context We selected seven drawdowns for testing of cash management relating to these major programs. We noted there was no formal approval or evidence of review for these drawdowns Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
2024-002 Finding – Federal Award Type: Special Reporting - Federal Funding Accountability and Transparency Act (FFATA) – Material Non- Compliance and Material Weakness in Internal Controls over Compliance. (Repeat of finding 2023-003) Identification of Federal Program: AL Number: 64.033 Supportive Services for Veteran Families Criteria / Requirement: 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282), as amended by Section 6202 of Pub. L. No. 110-252, that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The subawards meeting the above definition are to be reported no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made or the subcontract award/subcontract modification was made. Condition / Context: During the year June 30, 2024, CAT entered into three first-tier subawards greater than $30,000 under AL number 64.033. The auditor tested one of these subawards, noting that the award was reported late under the Federal Funding Accountability and Transparency Act to the Federal Subaward Reporting System. Per further inquiry, all of the first-tier subawards were reported late to FSRS. CAT was aware of the FFATA reporting requirements, but the timing of the previous year finding did not allow for corrections during the fiscal year 2024. Procedures were not in place to track and report first-tier subawards within the time frame required by federal requirements. Effect: Failure to maintain sufficient internal controls and proper procedures, including identifying compliance requirements of grant agreements and tracking over reporting first-tier subawards may result in wrongful use of federal funds and non-compliance with federal awards. Questioned Costs: None. Recommendation: The Organization should establish written policies and procedures regarding review of grant agreements for compliance requirements along with written policies and procedures for first-tier subawards including tracking and proper internal control procedures. Management’s Response: Management concurs with the finding and has defined corrective action to address it. We have identified gaps in our reporting processes and worked to implement changes to ensure compliance with special reporting requirements. Policies and procedures will be updated regarding special reporting requirements. The Fiscal department will also be responsible for reviewing all contracts to identify all compliance requirements. Tracking procedures will be implemented to ensure reports are filed timely. The above identified corrective action was implemented in July 2024. Stacey Wilson, Fiscal Director, has implemented a tracking system for the FFATA.
2024-004 - Allowable Cost/Cost Principles Federal Program Information: Department of Treasury - State & Local Fiscal Recovery Fund ALN - 21.027 - State & Local Fiscal Recovery Fund Criteria: The following CFR(s) apply to this finding: 2 CFR §200.303 Condition: During our testing of 9 disbursements under the State & Local Fiscal Recovery Funds, we noted that 4 disbursements totaling $460,844 were approved without following the City’s documented internal control procedures. Specifically, the City’s policy requires documenting the approval of invoices, but this process was not followed for the identified transactions. Cause: The control lapse occurred because there was turnover in key positions. Effect: By not following its own internal control procedures, the City increased the risk of unallowable or unsupported costs being charged to the program. Although we did not identify any unallowable costs in the items tested, the absence of proper approvals diminishes assurance that expenses are appropriate and compliant. Identification of Questioned Costs: None identified. Context: The entire population of 12 months of reimbursements from the fiscal year were examined which is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the City implement internal control processes and procedures to ensure that all invoices are approved per the City’s policy. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the City.
2024-004 - Allowable Cost/Cost Principles Federal Program Information: Department of Treasury - State & Local Fiscal Recovery Fund ALN - 21.027 - State & Local Fiscal Recovery Fund Criteria: The following CFR(s) apply to this finding: 2 CFR §200.303 Condition: During our testing of 9 disbursements under the State & Local Fiscal Recovery Funds, we noted that 4 disbursements totaling $460,844 were approved without following the City’s documented internal control procedures. Specifically, the City’s policy requires documenting the approval of invoices, but this process was not followed for the identified transactions. Cause: The control lapse occurred because there was turnover in key positions. Effect: By not following its own internal control procedures, the City increased the risk of unallowable or unsupported costs being charged to the program. Although we did not identify any unallowable costs in the items tested, the absence of proper approvals diminishes assurance that expenses are appropriate and compliant. Identification of Questioned Costs: None identified. Context: The entire population of 12 months of reimbursements from the fiscal year were examined which is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the City implement internal control processes and procedures to ensure that all invoices are approved per the City’s policy. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the City.
2024-004 - Allowable Cost/Cost Principles Federal Program Information: Department of Treasury - State & Local Fiscal Recovery Fund ALN - 21.027 - State & Local Fiscal Recovery Fund Criteria: The following CFR(s) apply to this finding: 2 CFR §200.303 Condition: During our testing of 9 disbursements under the State & Local Fiscal Recovery Funds, we noted that 4 disbursements totaling $460,844 were approved without following the City’s documented internal control procedures. Specifically, the City’s policy requires documenting the approval of invoices, but this process was not followed for the identified transactions. Cause: The control lapse occurred because there was turnover in key positions. Effect: By not following its own internal control procedures, the City increased the risk of unallowable or unsupported costs being charged to the program. Although we did not identify any unallowable costs in the items tested, the absence of proper approvals diminishes assurance that expenses are appropriate and compliant. Identification of Questioned Costs: None identified. Context: The entire population of 12 months of reimbursements from the fiscal year were examined which is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the City implement internal control processes and procedures to ensure that all invoices are approved per the City’s policy. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the City.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 245GA324N1199 (Year: 2024), 235GA32N1099 (Year: 2023) Questioned Costs: $7,388 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. 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 childcare 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 secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,087,437.24 were expended and reported on the Wilkinson County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District 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. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 39 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. For eight of the 10 sample expenditures that were incurred outside of the School District’s Co-Op process, evidence of review and approval was not reflected within the voucher package. Additionally, auditor reviewed five of these same expenditures and a sample of 29 additional expenditures, which was randomly selected for testing using a non-statistical sampling approach, to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiencies were noted with expenditures incurred outside of the School District’s Co-Op process: • Evidence of review and approval was not reflected within the voucher package and/or purchase files for 17 additional expenditures. • The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for eight small purchase expenditures reviewed. Questioned Costs: Upon testing a sample of $14,237 in procurement transactions that were incurred outside of the School District’s Co-Op process, known questioned costs of $7,388 were identified for expenditures that did not follow the School District’s procurement procedures. Using the population of procurements that were incurred outside of the School District’s Co-Op process of $56,274, we project the likely questioned costs to be approximately $29,200. Cause: The School District did not follow its policies and procedures that govern the nonpersonal services expenditure process for federal programs. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to CNC. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to CNC. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Strengthen Controls over Expenditures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Procurement and Suspension and Debarment Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 – National School Lunch Program Federal Award Numbers: 245GA324N1199 (Year: 2024), 235GA32N1099 (Year: 2023) Questioned Costs: $7,388 Description: A review of expenditures charged to the Child Nutrition Cluster revealed that the School District’s internal control procedures were not operating appropriately to ensure that expenditures were reviewed and approved and that the School District’s procurement and suspension and debarment procedures were followed. 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 childcare 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 secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,087,437.24 were expended and reported on the Wilkinson County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District 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. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Additionally, provisions included in the Uniform Guidance, Section 200.318 – General Procurement Standards state in part that “(a) the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations and… (b) non-Federal entities must maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders.” In addition, provisions included in the Uniform Guidance, Section 200.320 – Methods of Procurement to Be Followed provide guidance for procurement through small purchase procedures and state “If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources.” Condition: A sample of 39 expenditures was randomly selected for testing using a non-statistical sampling approach. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. For eight of the 10 sample expenditures that were incurred outside of the School District’s Co-Op process, evidence of review and approval was not reflected within the voucher package. Additionally, auditor reviewed five of these same expenditures and a sample of 29 additional expenditures, which was randomly selected for testing using a non-statistical sampling approach, to determine if procurement transactions complied with the School District’s procurement procedures and proper oversight was maintained to ensure that contractors were performing according to their contracts. The following deficiencies were noted with expenditures incurred outside of the School District’s Co-Op process: • Evidence of review and approval was not reflected within the voucher package and/or purchase files for 17 additional expenditures. • The School District could not provide evidence that an adequate number of rate or price quotations were obtained from qualified sources for eight small purchase expenditures reviewed. Questioned Costs: Upon testing a sample of $14,237 in procurement transactions that were incurred outside of the School District’s Co-Op process, known questioned costs of $7,388 were identified for expenditures that did not follow the School District’s procurement procedures. Using the population of procurements that were incurred outside of the School District’s Co-Op process of $56,274, we project the likely questioned costs to be approximately $29,200. Cause: The School District did not follow its policies and procedures that govern the nonpersonal services expenditure process for federal programs. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance related to CNC. Failure to ensure that expenditures are appropriately approved and procedures to address procurement and suspension and debarment compliance requirements are implemented exposes the School District to unnecessary risk of error and misuse of federal funds and could result in the expenditure of federal funds for unallowable purposes and/or with unqualified vendors. In addition, this deficiency could lead to the return of funding associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to CNC. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures reflect evidence of review and approval, required procurement methods are properly identified and followed and required procurement and suspension and debarment documentation is properly identified, safeguarded, and retained. In addition, management should develop a monitoring process to ensure that these procedures are operating appropriately. Views of Responsible Officials: We concur with this finding.
2 CFR 200.303 requires Non-Federal entities must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During fiscal year 2024, the District participated in Child Nutrition Cluster programs, for which the federal government reimburses the District for eligible children. During the school year, the School District is required to establish a child's eligibility to receive program benefits. The District accepted online applications for free and reduced meals, with which eligibility was determined based on several factors, including, but not limited to family size and income. For fiscal year 2024, the eligibility process was 100% online through PaySchools to determine eligibility for free and reduced meals. The option selected within PaySchools by the District was for the portal applications uploaded from RocketScan to be approved as entered (if the eligibility criteria was met) with no additional review, rather than applications being in pending status until reviewed and approved by the District. As such, the District had no procedures in place to ensure the system determined the proper eligibility status based on the information provided in the application. Failure to implement controls over all eligibility applications could result in ineligible students receiving benefits. The District should implement control procedures for online applications to help ensure students are properly marked as paid, free or reduced.
2 CFR 200.303 requires Non-Federal entities must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During fiscal year 2024, the District participated in Child Nutrition Cluster programs, for which the federal government reimburses the District for eligible children. During the school year, the School District is required to establish a child's eligibility to receive program benefits. The District accepted online applications for free and reduced meals, with which eligibility was determined based on several factors, including, but not limited to family size and income. For fiscal year 2024, the eligibility process was 100% online through PaySchools to determine eligibility for free and reduced meals. The option selected within PaySchools by the District was for the portal applications uploaded from RocketScan to be approved as entered (if the eligibility criteria was met) with no additional review, rather than applications being in pending status until reviewed and approved by the District. As such, the District had no procedures in place to ensure the system determined the proper eligibility status based on the information provided in the application. Failure to implement controls over all eligibility applications could result in ineligible students receiving benefits. The District should implement control procedures for online applications to help ensure students are properly marked as paid, free or reduced.
2 CFR 200.303 requires Non-Federal entities must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During fiscal year 2024, the District participated in Child Nutrition Cluster programs, for which the federal government reimburses the District for eligible children. During the school year, the School District is required to establish a child's eligibility to receive program benefits. The District accepted online applications for free and reduced meals, with which eligibility was determined based on several factors, including, but not limited to family size and income. For fiscal year 2024, the eligibility process was 100% online through PaySchools to determine eligibility for free and reduced meals. The option selected within PaySchools by the District was for the portal applications uploaded from RocketScan to be approved as entered (if the eligibility criteria was met) with no additional review, rather than applications being in pending status until reviewed and approved by the District. As such, the District had no procedures in place to ensure the system determined the proper eligibility status based on the information provided in the application. Failure to implement controls over all eligibility applications could result in ineligible students receiving benefits. The District should implement control procedures for online applications to help ensure students are properly marked as paid, free or reduced.
2 CFR 200.303 requires Non-Federal entities must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the non-Federal entity is managing Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During fiscal year 2024, the District participated in Child Nutrition Cluster programs, for which the federal government reimburses the District for eligible children. During the school year, the School District is required to establish a child's eligibility to receive program benefits. The District accepted online applications for free and reduced meals, with which eligibility was determined based on several factors, including, but not limited to family size and income. For fiscal year 2024, the eligibility process was 100% online through PaySchools to determine eligibility for free and reduced meals. The option selected within PaySchools by the District was for the portal applications uploaded from RocketScan to be approved as entered (if the eligibility criteria was met) with no additional review, rather than applications being in pending status until reviewed and approved by the District. As such, the District had no procedures in place to ensure the system determined the proper eligibility status based on the information provided in the application. Failure to implement controls over all eligibility applications could result in ineligible students receiving benefits. The District should implement control procedures for online applications to help ensure students are properly marked as paid, free or reduced.
Finding Number: 2024‐001 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Housing Voucher Cluster 14.871 N/A N/A Coronavirus State and Local Fiscal Recovery Fund 21.207 N/A N/A Federal Agency(ies): Department of Housing and Urban Development, Department of Treasury Pass‐Through Agency(ies): Direct, Arizona Governor’s Office Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Reporting Criteria Under 2 CFR §200.303, the City is required to establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, PHAs submit HUD‐52681‐B monthly to HUD electronically via the VMS. Critical information from this report including unit months leased, HAP expenses, unrestricted net position (administrative fee reserves), restricted net position (HAP reserves), and cash in investments should be accurate and supported. In addition, recipients of Coronavirus Local Fiscal Recovery Fund monies are required to submit Project and Expenditure Reports either quarterly or annually in accordance with the SLFRF Compliance and Reporting Guidance issued by the Department of Treasury. In addition, in accordance with 2 CFR §200.512, the single audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Condition The City did not have consistent processes and procedures to track federal grant information and expenditures. In addition, adequate supporting documentation for amounts reported was not maintained and the single audit was not submitted timely. Cause The City's internal controls were not adequately designed to track federal grant information needed for the Schedule of Expenditures of Federal Awards (SEFA). In addition, controls over document retention and report submission did not function as designed. Effect The City was not in compliance with federal regulations and guidelines for reporting. Context The following items were noted: The City does not have a consistent process to track federal grant information and expenditures. As a result, $113,998 of Coronavirus Local Fiscal Recovery Fund expenditures were not reported on the fiscal year 2023 SEFA. For all three Housing Voucher Cluster monthly financial reports reviewed, the City could not support how unrestricted net position and restricted net position agreed to the financial reporting software. The annual Project and Expenditures Report for the Coronavirus State and Local Fiscal Recovery Funds program did not have accurately reported obligation or expenditures amounts. The City's Single Audit Report was not completed and submitted within nine months of fiscal year‐end. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The City should standardize its process for tracking federal grant information, including the expenditure amount necessary for SEFA reporting. The City should design and implement effective internal controls over the review and retention of supporting documentation regarding the amounts reported. In addition, the City should implement better controls over financial reporting to ensure all documents are prepared and available for the timely completion of the financial and single audit reports. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Housing Voucher Cluster 14.871 N/A N/A Coronavirus State and Local Fiscal Recovery Fund 21.207 N/A N/A Federal Agency(ies): Department of Housing and Urban Development, Department of Treasury Pass‐Through Agency(ies): Direct, Arizona Governor’s Office Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Reporting Criteria Under 2 CFR §200.303, the City is required to establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, PHAs submit HUD‐52681‐B monthly to HUD electronically via the VMS. Critical information from this report including unit months leased, HAP expenses, unrestricted net position (administrative fee reserves), restricted net position (HAP reserves), and cash in investments should be accurate and supported. In addition, recipients of Coronavirus Local Fiscal Recovery Fund monies are required to submit Project and Expenditure Reports either quarterly or annually in accordance with the SLFRF Compliance and Reporting Guidance issued by the Department of Treasury. In addition, in accordance with 2 CFR §200.512, the single audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Condition The City did not have consistent processes and procedures to track federal grant information and expenditures. In addition, adequate supporting documentation for amounts reported was not maintained and the single audit was not submitted timely. Cause The City's internal controls were not adequately designed to track federal grant information needed for the Schedule of Expenditures of Federal Awards (SEFA). In addition, controls over document retention and report submission did not function as designed. Effect The City was not in compliance with federal regulations and guidelines for reporting. Context The following items were noted: The City does not have a consistent process to track federal grant information and expenditures. As a result, $113,998 of Coronavirus Local Fiscal Recovery Fund expenditures were not reported on the fiscal year 2023 SEFA. For all three Housing Voucher Cluster monthly financial reports reviewed, the City could not support how unrestricted net position and restricted net position agreed to the financial reporting software. The annual Project and Expenditures Report for the Coronavirus State and Local Fiscal Recovery Funds program did not have accurately reported obligation or expenditures amounts. The City's Single Audit Report was not completed and submitted within nine months of fiscal year‐end. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The City should standardize its process for tracking federal grant information, including the expenditure amount necessary for SEFA reporting. The City should design and implement effective internal controls over the review and retention of supporting documentation regarding the amounts reported. In addition, the City should implement better controls over financial reporting to ensure all documents are prepared and available for the timely completion of the financial and single audit reports. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Housing Voucher Cluster 14.871 N/A N/A Coronavirus State and Local Fiscal Recovery Fund 21.207 N/A N/A Federal Agency(ies): Department of Housing and Urban Development, Department of Treasury Pass‐Through Agency(ies): Direct, Arizona Governor’s Office Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Reporting Criteria Under 2 CFR §200.303, the City is required to establish and maintain effective internal controls over Federal awards that provide reasonable assurance that the City is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, PHAs submit HUD‐52681‐B monthly to HUD electronically via the VMS. Critical information from this report including unit months leased, HAP expenses, unrestricted net position (administrative fee reserves), restricted net position (HAP reserves), and cash in investments should be accurate and supported. In addition, recipients of Coronavirus Local Fiscal Recovery Fund monies are required to submit Project and Expenditure Reports either quarterly or annually in accordance with the SLFRF Compliance and Reporting Guidance issued by the Department of Treasury. In addition, in accordance with 2 CFR §200.512, the single audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Condition The City did not have consistent processes and procedures to track federal grant information and expenditures. In addition, adequate supporting documentation for amounts reported was not maintained and the single audit was not submitted timely. Cause The City's internal controls were not adequately designed to track federal grant information needed for the Schedule of Expenditures of Federal Awards (SEFA). In addition, controls over document retention and report submission did not function as designed. Effect The City was not in compliance with federal regulations and guidelines for reporting. Context The following items were noted: The City does not have a consistent process to track federal grant information and expenditures. As a result, $113,998 of Coronavirus Local Fiscal Recovery Fund expenditures were not reported on the fiscal year 2023 SEFA. For all three Housing Voucher Cluster monthly financial reports reviewed, the City could not support how unrestricted net position and restricted net position agreed to the financial reporting software. The annual Project and Expenditures Report for the Coronavirus State and Local Fiscal Recovery Funds program did not have accurately reported obligation or expenditures amounts. The City's Single Audit Report was not completed and submitted within nine months of fiscal year‐end. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The City should standardize its process for tracking federal grant information, including the expenditure amount necessary for SEFA reporting. The City should design and implement effective internal controls over the review and retention of supporting documentation regarding the amounts reported. In addition, the City should implement better controls over financial reporting to ensure all documents are prepared and available for the timely completion of the financial and single audit reports. Views of Responsible Officials See Corrective Action Plan.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Reporting compliance requirements. Criteria: 2 CFR section 200.303 states in part: "The Non-Federal entity must: Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Cause: CICOA's management did not maintain a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: Several required reports were not submitted timely to the Indiana Family and Social Services Administration in accordance with its grant awards. The following reports were identified as not being completed and submitted timely: The expenditure data is to be entered within 75 days of the quarter. From a sample size of four, the December 31, 2023, and the June 30, 2024, reports were not fully completed and submitted within the 75-day requirement. The non-federal expenditures report is to be submitted within 15 days after the end of the quarter. None of the quarterly reports were filed until November 19, 2024. Recommendation: We recommend that CICOA establish controls to ensure proper monitoring exists to ensure all reporting requirements for the grants are prepared and submitted timely. Views of Responsible Officials and Planned Corrective Actions: Management recognizes its compliance requirements for maintaining and implementing sound controls over financial reporting and the potential non-compliance impacts of a lack of such control environment. Steps have been taken and implemented on January 1, 2025 to ensure adequate oversight and review takes place. All reporting requirements and due dates are currently being submitted timely.
Reference Number 2024-002 Federal Program: 21.027 – Coronavirus State and Local Fiscal Recovery Funds Federal Agency U.S. Department of Treasury Pass-Through Entity State of California Evaluation of Finding Significant Deficiency Compliance Area L – Reporting Condition During the allowable cost testing for the 21.027 Coronavirus State and Local Fiscal Recovery Funds program, it was found that an expenditure of $945,041 was recorded in the wrong period. The invoice indicated that the services were rendered as of June 30, 2023, but the expenditure was recorded as July 1, 2023 instead. This misstatement impacts the accuracy of financial reporting and grant compliance. Criteria According to 2 CFR 200.302(b)(3) and 2 CFR 200.303, entities receiving federal funds must maintain effective internal controls over financial reporting to ensure accurate and timely recognition of expenditures in the appropriate period. Cause of Condition The City's internal controls over financial reporting and expenditure recognition were not effectively designed or implemented, leading to recurring errors in the timing of recorded expenditures. Effect or Potential Effect of Condition Improper recording of expenditures can lead to misstatements in financial reports, noncompliance with federal grant requirements, and potential audit findings. Continued recurrence of this issue may impact the entity’s ability to demonstrate sound financial management practices. Recommendation We recommend that management continue to strengthen internal controls over expenditure recognition by implementing enhanced review procedures and periodic reconciliations to ensure expenditures are recorded in the appropriate period. Client Response The City agrees with the recommendation and has implemented new procedures and review processes to ensure expenditures for federal programs are recognized in the appropriate fiscal year's Schedule of Expenditures of Federal Awards (SEFA).